Property Market Overview I Q 2024 -Tallinn and Harju County
- Transaction activity in the first quarter was low, falling 170 transactions short of the previous year’s first quarter.
- The average price per square meter for apartment transactions in the first quarter ranged between approximately 2,900 to 3,000 EUR/m².
- The number of listings for apartments and houses remains high, with asking prices not experiencing significant declines.
The beginning of 2024 saw a more active start in terms of apartment property sales transactions in Tallinn compared to the previous year. In January, a total of 540 sales transactions were recorded, an increase from 457 transactions in the same month the previous year.
February maintained the same level as the previous year, with 614 transactions this year compared to 617 last year. However, March saw a divergence in trends: whereas March 2023 witnessed 827 apartment sales, this year the number dropped to 577.
Overall, the first quarter of this year totaled 1,731 apartment sales, averaging just under 580 per month. This is a decrease from last year’s first quarter, which had 1,901 transactions at an average of 633 per month. Consequently, the activity in Tallinn’s apartment market remains low and below both last year’s average and our expected levels (650 to 670 transactions per month).
The hopes at the end of last year for a quicker decline in EURIBOR rates by mid-this year have been postponed, diminishing its positive impact on potential buyers. With the arrival of spring, there is a slight increase in buyer interest, but a rapid growth in transaction numbers is not anticipated.
The average sale price per square meter for apartment transactions in Tallinn has been fluctuating between approximately 2,900 to 3,000 EUR and has largely remained the same for nearly two years.
Only during the months with a higher number of new apartment sales have the prices been elevated. Following a slight decrease in the number of apartment listings in Tallinn during the year-end months, which is typical, the count of listings began to rise from February, reaching 5,000 and climbing to about 5,300 by March.
This represents an increase of nearly 10% over the second half of the previous year. Given the relatively low transaction activity, it is likely that the number of listings will remain high for an extended period, and there is no reason to anticipate an increase in the average selling price.
In the first quarter of 2024, a total of 10 sales transactions were made with apartments priced from 700,000 EUR in Tallinn, with the most expensive apartment sold for 891,000 EUR.
Regarding house sales, we have examined transactions involving houses in Tallinn and the surrounding municipalities (Harku, Saue, Saku, Kiili, Rae, Jõelähtme, and Viimsi municipalities).
In the first quarter of 2024, 38 houses were sold in Tallinn and 61 in the neighboring municipalities, totaling 99 transactions. This performance is an improvement compared to the first quarter of 2023, during which there were 35 transactions in Tallinn and 47 in the neighboring municipalities (a total of 82 transactions), although it is slightly below the average number of transactions for the previous year, which was 114 (42 in Tallinn and 72 in the municipalities).
The number of house listings on the kv.ee portal, which began to increase in the spring and summer of 2022 and reached over 1,644 by the end of last year, remains consistently at the 1,600 level. It is likely that the number of listings has reached its peak. Many small developers, who were building detached houses for sale in the latter half of last year, have not started new projects and are focusing on selling existing properties.
Therefore, the current period can be considered the greatest opportunity in recent times for those looking to buy a detached house. The availability of new houses, either completed or nearing completion, will probably decrease in proportion to how many are purchased.
We forecast the following trends for the real estate market in the coming months:
The number of apartment property transactions is expected to remain at the level of 650 to 700 transactions per month.
The average price per square meter for apartments is likely to stay close to 3,000 EUR/m2.
There may be a statistical increase if there are more new apartment completions in some months than usual.
The number of listings for newly completed houses will gradually begin to decline.
With the continued high level of listings and moderate transaction activity, potential buyers have the opportunity to take their time to choose and consider their options carefully.
Transactions are primarily expected to be concluded for properties that are priced correctly and sellers who are flexible.
Compiled by Urmas Tehver
urmas.tehver@balsir.com
Baltic Sotheby’s International Realty Estonia