One of the quickest inflations in the Euro region plus the top position on the leaderboard of coronavirus have not had any negative impact on consumer confidence. On the contrary, the market has remained active – low offering with stable demand and the best loan terms of the decade facilitate purchase of real estate as well as other assets.

Estonia

Significant influence of new developments was first of all reflected in the number of transactions in Harju County. Based on the first four months of the year, the median price in Harju County has increased by more than 7%. Of other larger counties, the number of transactions in Ida-Viru County increased, which may be due to the influence of the pension reform.

Even though no drop in demand can yet be seen, it is of some concern that the price of real estate increases quicker than salaries: if salaries have increased by 7.3% in annual comparison, the price increase of real estate has been over 10%. The affordability of real estate used to be stable for a while but now it is possible to buy a 0.8 m2 piece of an apartment for the net salary of one month. Even two years ago it was possible to get 10% more of the area, i.e. that is how much affordability of real estate has dropped in past two years.

Apartment market in Tallinn

In Tallinn, a significant threshold – 1,000 apartment transactions in one month – was crossed for the third time last year. 1,046 transactions was the highest figure since May 2007. Characteristically of this year, the high number of transactions was supported by the active secondary market with over 800 transactions concluded, whereas 218 transactions were concluded with new developments, i.e. nearly 21% of the total number of transactions.

Increased input prices and low offering took the median price of transactions close to the record level – 3,000 €/m2.