The Secondary Market for New Apartments Became Active Again

Last year, the number of new development transactions grew by 23 percent, with the largest increase seen in the secondary market for new apartments, according to data from housing developer Bonava and real estate portal Kinnisvara24, which has become the largest platform for new development offerings.

The most transactions with new developments are conducted in Haaberstis, where prices are more affordable and there is more supply, but buyers also highly value the city center and North Tallinn areas. According to Bonava's sales and marketing director Lauri Laanoja, there is great potential in Lasnamäe, where the supply of new homes is currently extremely low. As the market becomes more active, one could also expect to see an increase in supply in Tallinn's nearby municipalities.

Whereas in years with the highest sales figures, the inventory of new homes has typically been equal to annual sales volume, according to Tallinn's largest housing developer Bonava, the current inventory now represents even a couple of years' worth of sales.

"Developers are working hard, but the third year of economic downturn and high interest rates have inevitably made buyers more cautious, and as a result, the inventory of new developments has grown," explained Kinnisvara24 director Urmas Uibomäe. "At the same time, this is a good opportunity for the buyer – if you dream of your own brand new home, it's worth keeping an eye out now, because the choice of different areas and floor plans is very wide."

The largest selection of new developments can be found today on the Kinnisvara24 portal, where 176 new developments are for sale. Compared to a year ago, the number of offerings has grown by 20%.

According to Uibomäe, new developments are the cream of the market. "I dare to say that this is one of the most important parts of the real estate market, which is why it is particularly significant that our target group has received us so well and we have managed to become market leaders in this field in a short time," he added. "Our goal is to show that portal business can be done with a more reasonable pricing and advertising prices on the portal don't have to be so expensive – we are probably also more appealing to new developers and the younger generation because of this."

On the Kinnisvara24 portal, listings marked as new development make up about 8% of all listings, but if you also count listings where the condition is marked as new, these make up 24% of all offerings. According to Uibomäe, it is also visible that listings are added on a monthly basis.

Although there is generally a lot of supply on the new development market, prices remain stable. "Discounts are offered in the form of a kitchen included in the home price, a parking space, or a storage room," said Laanoja, who predicts a similar course for the current year as for the past year. "There is an inventory of ready apartments on the market and competition remains tight, so I would not predict a large price increase, but due to tax increases and rising input prices, prices for new apartments could still rise by 5-10%."

According to the state bill, starting from September 1, 2025, new public larger buildings and apartment buildings will also be subject to the requirement to build shelters, which will make building new developments more expensive than the state's forecast. The price of new developments could also be affected by the long-awaited end of the war in Ukraine. "When the war ends, a large country will need to be rebuilt, which will certainly create a construction boom and could lead to an increase in construction material prices in Estonia as well," added Uibomäe.