Estonian Real Estate Review, December 2021

Posted on Sunday, January 23, 2022 by Jaanus SõrmusNo comments

Estonian Real Estate Review, December 2021

Year 2021 that ended up losing just to the very peak of the last boom came to conclusion with an active December. In December, for the third consecutive month, over 2,500 apartment transactions were concluded; due to increased volume of new developments, the median price achieved the best result of all time (1,915 €/m2).

In total, 27,298 transactions were concluded with apartment ownerships. In comparison to year 2020, the total turnover of the apartment market increased by 36%, the number of transactions increased by 24.7% and the median price by 9.8%.

Estonia

As for the number of transactions, year 2021 was only beaten by years 2005 and 2006. Regardless of the increased demand, the real estate market is characterised by low flexibility of offering, as at the end of year 2021, the number of transactions was more than 30% lower than the year before, which, accompanied by lower interest rates and increased amounts of time spent at home leads the price increase also in the 1st half of this year.

Dynamics of the Estonian apartment market

Apartment market in small towns

All of the counties showed an increase both in the number of transactions and price, the largest increase in the number of transactions could be observed in Ida-Viru County (35%), the median price, however, in Valga County (44%). 14,300 transactions were concluded in Harju County,, which was 52.4% of the total number of transactions. Last year, 54% of the total number of transactions were concluded in Harju County, and considering the faster increase in the number of transactions for country houses and plots of land, we can see a faster than average increase in regional real estate investments thanks to the continued popularity of hybrid work.

It was a very good year in the markets of the main towns: the number of transactions dropped or remained at the same level only in Paide and Kärdla, whereas only Elva showed a price increase below 10%. The number of transactions increased over 40% in Maardu, Valga and Türi; the highest price increase could be seen in Põltsamaa (56%), Jõgeva (38%) and Türi (36%); in absolute figures, the median price outside Harju County was the highest in Kuressaare (1,091 €/m2), Viljandi (1,000 €/m2) and Haapsalu (986 €/m2), whereas in Kohtla-Järve, median price was below 100 €/m2.

Apartment market in towns 2021

Apartment market in Tallinn

Year-end in Tallinn was traditionally active – the number of transactions exceeded 1,000 for the third consecutive month, and thanks to the highest share of new developments throughout the year, the median price record was broken with 2,485 €/m2.

In total, regardless of a drop in the number of new developments by over 600, 10,881 transactions were concluded during the year, which was 37% more than in 2020 and nearly 22% more than in 2019. The median price of transactions in 2021 was 2,224 €/m2, the price figure increased by 9% in one year. For new developments, the median price of transactions was nearly 2,900 €/m2 (the peak price was 6,000 €/m2), and nearly 2,100 €/m2 in the secondary market. In the brick and panel buildings of the Soviet area in Lasnamäe, Mustamäe and Õismäe, the best 2-room apartments cost 110,000 euros and 3-room apartments 130,000 euros, whereas in 2020, the corresponding figures were 90,000 euros and 115,000 euros.

Apartment market in Tallinn

Apartment market in Tartu

In Tartu, for the tenth time during the past year, at least 200 transactions were concluded, the number of new developments was high again, forming 31% of the total number of transactions. In comparison to the other larger towns, the number of transactions with new developments increased in Tartu. 618 transactions were concluded in 2020, 722 transactions in 2021. Like in Tallinn, the best median price in all time was achieved in December – 1,874 €/m2. In comparison to year 2020, the number of transactions increased by 33% (25% in comparison to year 2019), the median price of transactions increased by 10%.

The total number of transactions in 2021 was 1,104, which was 26% more than the year before. If we exclude the micro apartment developments at Lai 29 and Pepleri 34 with nearly 120 first sale transactions, due to the larger volume, the median price of new apartments was lower than in Pärnu (about 2,000 €/m2), the peak price of the best apartments was 3,400+ €/m2, whereas for the developments at Pepleri 34 and Lai 29, the median price was about 3,600 €/m2. The peak price of apartments in the standard buildings from the Soviet era reaches 2,200 to 2,300 €/m2.

Apartment market in Tartu

Apartment market in Pärnu

In December, 92 transactions were concluded in Pärnu, which was the average result of last year. As 21% of the transactions were concluded with new developments, which was the highest result of the year, the median price broke a new record – 1,668 €/m2.

The total number of transactions in 2021 was 1,104, which was 26% more than the year before. Regardless of the lower number of new developments by nearly 60, the median price of transactions increased by 12%, reaching 1,415 €/m2. The median price of new apartments was nearly 2,400 €/m2 in Pärnu, the prices of the top transactions were 4,000+ €/m2. The peak price of apartments in the standard buildings from the Soviet era reaches 2,100 €/m2.

Apartment market in Pärnu

Apartment market in Narva

The market of Narva that became active in August and got another boost from the pension reform continued on high tide also in December. Over 100 transactions were concluded for the third consecutive month: 110 transactions were concluded in October, 110 in November and 109 in December. In total, 991 transactions were concluded during the year, which was 47% more than the year before and 31% more than in 2019.

Active market and low number of offers in the past months have also brought along the highest prices of the recent years – in December, the median price of transactions was 449 €/m2, for the whole year it was 437 €/m2. In comparison to the year before, the median price of transactions in Narva increased by 9%. The prices of the best 2-room apartments in Narva were over 40,000 euros and over 60,000 euros 3-room apartments. One year before, 2-room apartments cost at least 30,000 euros and 3-room apartments 45,000 euros.

Apartment market in Narva

Market of houses and summer houses

The market of houses and summer houses was calm as usually during the low season – 345 transactions were concluded all over Estonia, which was about 50 transactions less than in November and over 100 transactions less than in summer months.

In total for the year, the number of transactions in the market of houses and summer houses increased by 26%, the number of transactions with unimproved residential land, however, increased by 58%. The average price of houses increased by 18% (113,000 €→133,000 €) and the average price of plots by 14% (42,000 €→48,000 €).

Estonian market of houses and summer houses
 
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