The most significant influencer on the real estate market in the past year was the rise in interest rates, the consequences of which have largely materialized. When combined with low consumer confidence, increasing unemployment, and a decline in purchasing power, we have a perfect cocktail that will characterize the first half of this year. In the second half of the year, positive economic moments are already visible, albeit with some delay reaching the real estate market.

According to preliminary estimates, approximately 21,000 apartment transactions were concluded throughout Estonia in 2023. Compared to 2022, when 25,079 transactions were concluded, the number of transactions decreased by 16.3%, and compared to the boom year of 2021, the decrease was 23.2%. We made predictions among our people for the current year, and in terms of market activity, we see that the situation remains generally the same – the market is calmer in the first half of the year and more active in the second half.

The median price for Estonian apartment market reached a record €2,100/m2 in 2023. Compared to 2022, the price level increased by 4.6%. However, the price increase is purely statistical, driven by both the annual increase in the share of Tallinn (from 38% to 41%) and the growth in the share of new developments concluded during the earlier period of rapid price increases.

If we divide the Tallinn market into new developments and the secondary market, we can see that in recent months, the median price of transactions in the secondary market has remained around €2,600/m2, dropping more than 5% from the peak in the third quarter of last year. The asking price for new developments has dropped from €4,400/m2 to nearly 7% to €4,100/m2, and the decline has also affected the statistical market, i.e., the transaction prices of new developments. The share of new developments in transactions was 26% in 2022, but in 2023, it exceeded 30%. Experts at Uus Maa predict that this year the price level will remain at a similar level.

In December, a total of 1,693 apartments were sold across Estonia (compared to 1,718 in November), with a record median price per square meter of €2,370. Compared to November, the price level increased by 15.6%, and on an annual basis, it rose by 6.2%.

In Tallinn, 810 transactions were conducted (compared to 685 in November), with a median price per square meter reaching €3,313. There was a month-on-month price increase of +12.4% and an annual increase of +5.1%. As usual, the numbers for December were significantly influenced by the real estate transactions of new developments.

In Tartu, 133 sales transactions were concluded in December (compared to 154 in November), with a median price per square meter of €2,651. While the median price remained virtually the same on a monthly basis (-0.3%), there was a 20.3% increase in the price level on an annual basis.

December continued to be quiet in Pärnu – 56 transactions were concluded in November, and in December, there were 53. The median price for apartments per square meter was €2,025. There was a month-on-month decrease in the price level of 19.7% and an annual decrease of 12.3%.

In Narva, 52 apartments were sold in November (compared to 83 in November), with a median price per square meter of €500. Compared to November, there was a 6.6% decrease in transaction prices, and on an annual basis, there was a 7.1% decrease.