Data about Real estate market
Why to invest to Estonia
Real Estate in Estonia (number of deal per month, number of offers on the market, average price for different types of appartments)
Real estate historic market development shows that prices are close to pre-crises level, however annual growth rate since 2012 is steady. In 2016 average m2 continues to grow mainly due to increased share of new projects.
Data source: KV.EE biggest real estate website in Estonia
Number of active apartments offering is stable over last 3 years which indicates that demand and supply are well balanced
Data source: KV.EE biggest real estate website in Estonia
According to STAT.EE (Department of Statistic in Estonia) number of transactions with apartments are growing for 3 years in a row already
Tallinn and Tartu represent 64,8% of all transactions in residential apartment market.
Data source: Estonian Land Board, transactions database
Tallinn represents 53,9% of all transactions where distribution between districts are following. During Jan-Oct 2016 almost 8000 apartments were sold.
In order to see different price levels per apartment size you can go webpage of Estonia Land Board and check transactions database.
http://www.maaamet.ee/kinnisvara/htraru/
Apartments rental market
Apartment rental market is on the beginning stage of its development. In comparison to business rental segments (office, retail, warehouse) apartment market primary consists of private owners and only behind few projects where big investors. Short- term rent of apartments becoming more and more popular, thanks to Booking.com and AirBnB success. We see several companies who started to invest in short term rental apartments, seeing higher yield of income in comparison to the long-term rent of apartments. If such tendency continues we foresee further decline of available rental apartments for long-term rent, which will continue to push prices up.
Estonian families prefer to own apartments instead of renting and that explains situation, when share of rental market is rather low in comparison to developed countries.
Residential rental apartment, Tallinn
Residential apartment market prices are continue to grow because of several reasons
- Inhabitants’ income increase
- Growth of population in Tallinn (ca 3-7% per year) due migration from other regions of Estonia
- Short term rent of apartment is becoming more popular thus less apartments available for long term rent
- Market if driven by private owners thus limited investments into new rental apartments
Data source: KV.EE 2016
Data source: Ober-Haus, Baltic market report 2016
Available Residential rental apartments by types in Dec
Typical rental apartment is 1-3 room apartment. More than 85% are apartments located in rather old building (older than 2003). Clear lack of supply of mini apartments 9-16m2 which suits ideally for people with need to rent apartment for 6-12month period because of temporal reasons: students and workers.
Data source: KV.EE and City24.EE Dec 2016
Summary
Residential rental apartment market demand is higher than supply, which drives prices up. Popularity of short-term rent takes many apartments from long term rent market.
Taking into account that traditional share of rent VS own for Estonian families is much lower than in western developed countries, we see good perspectives for residential rental market development.
Tallinn is main market for residential rental apartments and due to the growth of population we do not foresee price decrease in coming years. Investments into residential apartment market are not significant and driven by private owners which is good opportunity for big investors to come in.