Postimees · New Home (Uus Kodu) · 2025
Time to buy or wait? What is happening in the housing market?
English translation of the original Estonian article. Original headline: Aeg osta või oodata? Mis toimub eluaseme kinnisvaraturul?
See the original design in the magazineThe last few years on the property market have been turbulent at times, considering inflation, rising interest rates and taxes, the addition of new taxes and political uncertainty, but on the whole things seem to be calming down. What happened in the housing market in the third quarter? Where is the biggest oversupply, and in which area is there a shortage? What does the future hold?
We look for answers to these questions to bring more clarity to important decisions. Sharing their expert assessment of the housing market for informed choices are Lenne Kontor, certified senior broker at Domus Kinnisvara, and Sten Renar Subatšjus, certified junior real estate valuer and head of PR and analysis projects at the Uus Maa real estate agency.
Prices and the number of transactions have stabilised.
Buying and selling a home is of course more closely linked to changing personal needs than to politics or simply acting on a whim. There are many reasons why people change homes. The family grows, or the children have grown up and moved out, older people move closer to their children, or young people move for their studies.
Many homebuyers, investors and developers faced tighter lending conditions, taxes and a rising Euribor until quite recently. Now that the base interest rate has been gradually declining for some time, the market has also calmed down.
Subatšjus of Uus Maa explains: "The Estonian economy has been through fairly turbulent times over the past couple of years, with geopolitical tensions also having an impact in the background. All this has created general uncertainty in our property market, and that's why we have also witnessed stagnation for a long time. In terms of the number of transactions there have been more and less active months, but prices have stayed fairly static."
Uus Maa's third-quarter property market review shows that, according to the Estonian Institute of Economic Research, the economic confidence index has risen several points, giving hope for more positive prospects. Although people still don't trust the government's economic policy, they are borrowing briskly. In the third quarter of 2025, loan turnover rose to 662.2 million, and the average loan amount also grew to 141,698 euros.
Lenne Kontor adds: "Today's stability in both prices and transaction volumes has broadly held for a few years now. The housing market reflects the fact that people always need a place to live, and their needs are constantly changing too. That kind of needs-based selling and buying is exactly what I see on the market today."
The impact of changes in Euribor on purchase decisions.
While previously a high Euribor made people looking to move think things over for longer, which in turn affected the number of transactions, the situation has now rather changed. We can observe a calmer picture: the number of transactions is rising, but prices are no longer growing at such a pace. Euribor has currently held at 2.1%.
Subatšjus adds that, since Euribor has stabilised, people have finally got used to taking it into account in their borrowing decisions. The fear of the base rate has disappeared, and it has once again become a normal part of the lending process.
Uus Maa's review shows that the average household in Tallinn can currently afford an apartment of about 80 m² (based on 1.5 times the average salary). A single person can buy an apartment of about 64 m² (based on the average salary). The median price per square metre of an apartment in Tallinn remains stable at between 2,800 and 2,900 euros.
In some areas, demand still exceeds supply.
Although there are areas where new developments struggle to sell their units, there are also situations of shortage. Lenne Kontor says that, for example, there is a lack of large family apartments in the city centre. "There's little choice, and at the same time buyers are quite demanding when it comes to such a product and want a home or location that suits their needs exactly," she adds.
The secondary market is still the most active in apartment sales, accounting for 89% of transactions in the third quarter. Lenne Kontor points out: "There are asset groups where supply is rather plentiful and prices therefore very settled, or where sellers even come down in price for a quick deal."
According to Kontor, the population continues to grow fastest in Tallinn and Tartu, but growing buying interest can be seen precisely on the outskirts of these cities and outside them – whether in developments of complete neighbourhoods or among residential plots. According to Uus Maa's quarterly report, as of September there were 2,332 active offers of private houses in Harju County and 654 in Tallinn at the same time.
The third-quarter data shows that the average price per square metre in new developments around Tallinn exceeded 3,500 euros in September. The private house market continues to show an upward trend in the number of transactions, average price and turnover. By contrast, there are a total of 2,702 vacant apartments in Tallinn's new developments, with the biggest oversupply in North Tallinn, according to the report.
We look to the future optimistically.
Assessing the present situation, it seems one can look to the future fairly calmly. In Lenne Kontor's opinion, no major change of direction is on the horizon. "People still need places to live, just as they need to change them for bigger, smaller or differently located ones," she adds.
Subatšjus sees the situation similarly, pointing to the stabilisation of Euribor and the fact that bank margins are currently favourable for people. "Taking future forecasts into account too, all the factors together create a rather good basis for putting money into real estate. There's no sign that property prices should fall, especially on the secondary market. So there are more positive opportunities in exactly this sector next year," Subatšjus says with conviction.
Representatives of both agencies share optimism. "Next year people's salaries will probably grow faster and more than median property prices, which will make property more affordable for people. The keyword of next year is the secondary market, which will narrow the gap between secondary-market and new-development prices. Rising secondary-market prices will also push up rents," Subatšjus shares his view of the future. All in all, it seems that decisions concerning residential property can currently be made with a fairly calm heart.