April marked yet another month where the number of deals in Tallinn’s real estate market exceeded a thousand, continuing the now six-month trend. The last time the market was this active was 12 years ago, prior to the economic recession in 2008.
“There has not been such a high amount of deals made in 12 years. In November last year, we were six deals under 1,000, in March, there were 1,004 deals, 1,020 in April. We’ll see if it keeps growing in this pace,” real estate analyst Tõnu Toompark told ETV’s “Esimene stuudio” on Wednesday.
A reason why real estate prices are continuing to grow and only more expensive apartments are being swooped up, is that there are more buyers than sellers. Furthermore, banks are offering loans at quite reasonable interest rates. Homebuyers make up 80 percent of all deals with 20 percent buying real estate for rental investments. Foreign capital is also making investments into Estonia’s real estate market.
A year ago, when the global coronavirus pandemic hit Estonia, real estate forecasts were rather pessimistic. The main thought was that prices could fall up to 15 percent, but month-by-month and quarter-by-quarter, forecasts turned a more optimistic side. Still, the market was at a standstill in wait of development and that period left a slight vacuum, which is still being filled. That is to go with money-printing in Europe and inflation, both bringing in available money to the market.
“There was a danger of deficit,” Toompark said. He emphasized that there is actually no shortage of apartments available. In addition to some 1,200 new apartments, there are still older living spaces for sale, as well.
Toompark did not agree with show host Johannes Tralla’s estimation of real estate prices continuing to grow. He pointed to 2009, when the Great Recession arrived – real estate prices dropped 50 percent from high prices in 2007.
Read more: ERR.EE