Foreign Real Estate Transactions in Estonia: Russians Selling and Americans Buying

Foreign interest in Estonian real estate is on the rise, but sales transactions dominate over investments, occurring over a third more frequently than purchases, according to statistics from the Land Board and Kinnisvara24.

Throughout history, foreigners have shown the most interest in Estonian real estate in the late 1990s and early 2000s, when Nordic countries saw good investment opportunities in Estonia. Today, interest has generally been maintained, but the desire to purchase has weakened and sales transactions dominate – according to the Land Board data, foreigners conduct 36% more sales transactions than purchases.

"If about 25 years ago, foreigners bought residential real estate in Estonia primarily for investment purposes, hoping for price increases, then today real estate prices have reached a level where investment is no longer a focus," admitted Urmas Uibomäe, CEO of Kinnisvara24. "Rather, real estate is purchased out of direct necessity – for example, as a personal home, especially if there is a connection to Estonia."

Finns and Russians show the greatest interest in Estonian real estate

Although the real estate portal is visited most actively by Finns, Americans, and Germans from abroad, the most transactions are conducted by Finns and Russians. Among regions, Harju County, Ida-Viru County, and Saaremaa are the most popular among foreigners.

"If 3 years ago Russians purchased real estate in Harju County in the largest volumes, then this year Americans dominated the market, conducting 7 purchases last month, with a total sum exceeding 7 million euros," added Uibomäe, who noted that Estonia is viewed as a well-functioning innovation nation with information technology. "Entrepreneurs see business potential here today and are expanding their companies into Estonia," commented Uibomäe on the increased interest from Americans.

On the sales market, Russians have stood out this year, particularly in Ida-Viru County, where 21 sales transactions were conducted last month. "Whereas previously Russians have shown interest mainly in acquiring real estate, last month's data shows that today there is vigorous withdrawal from the market and predominantly sales transactions are being conducted," added Uibomäe. "Undoubtedly, the current military situation plays a role here, which has made real estate transactions considerably more complex if not impossible for Russians and is forcing them to exit the market."