The power dynamics of the luxury real estate market are largely set by the new development market, where 65% of transactions were concluded in 2022 and 2023. The lowest price level in the luxury real estate market starts from 4,000 €/m2, reaching mainly up to 6,000 €/m2 for larger apartments over 100 m2, and up to 7,000 €/m2 for smaller apartments. However, there were several transactions above the prevailing price level, with the peak of transactions around 10,000 €/m2. In absolute numbers, the price peak for the most expensive apartments was between 1 and 1.8 million euros. Most transactions take place in four areas: Kadriorg, City Center, Old Town, and the Tallinn waterfront (mainly from Meerhof to Noblessner).

Which apartments are highly valued in the eyes of home seekers? A well-thought-out layout is valued, where every smaller detail is also important. Certainly, a high ceiling, which provides airiness and spaciousness, and a bathroom for each bedroom, are considered valuable features. It is also important to emphasize that a luxury apartment should be located in a dignified building. Conversely, if an excellent apartment is located in a tired building, unfortunately, one cannot ask for a price premium. Thus, we increasingly encounter clients who are willing to pay a higher price for a quality and thoughtfully designed apartment.

In 2022, 122 transactions were made with luxury apartments, with a median price of 4,928 €/m2. Since no major development reached the statistics in the first quarter, only 16 transactions were concluded during this period, while in the second, third, and fourth quarters, the number of transactions fell quite evenly (33–39 transactions). The luxury real estate market dynamics were largely determined by the new development market, where 60% of the transactions were concluded. The most popular new developments were three waterfront developments: Tivoli along Reidi tee, Noblessner, and Kalaranna quarter, where 2/3 of the luxury real estate new development transactions were concluded.

In 2023, the number of transactions increased to 195, with a median price of 5,252 €/m2, which is 6.5% higher than in 2022. The more active quarters were the second and the fourth, when the volume of new development transactions was larger. In addition to Noblessner and Kalaranna quarter, contributions were also made by Uus-Volta, Uus-Verenni, Teatri Maja, and the Merirahu villas and Kodulahe in Haabersti. On the secondary market, buildings constructed in the last 10 years and apartments in historical buildings stood out.

Luxury apartments and houses built over the last 10 years have been a significant part of the market activity. Approximately 50% of transactions were made in privately owned houses during 2022 and 2023. The price range for these houses started from 750,000 euros, mostly falling between 820,000 euros and 1,250,000 euros. In 14 transactions, the final price exceeded 1.5 million euros, with the peak transactions reaching 2.5 million euros. Geographically, houses located near the sea from Kloogaranna to Tammneeme contributed the most to these transactions. Additionally, a handful of transactions were also made in Pirita, Nõmme, Kristiine, and in the surrounding areas of Tallinn in Rae and Saue municipalities.

For more valued houses, it has been observed that size is no longer the most important feature in making a purchase decision, while there is an increasing focus on energy efficiency. The house must be economical and manageable. Regarding location, the rule is that the house must be situated in a beautiful natural environment. In terms of interior design, Scandinavian style and timeless minimalism are preferred, while overloaded and vivid interiors tend to repel more demanding clients. Houses should definitely offer space also for family’s hobbies.

Since luxury houses are usually built to order and almost never for speculative development, the change in interest rates and the growing uncertainty in the environment were significant influencers of activity. While 44 transactions were concluded in 2022, only 22 transactions were concluded in 2023. The peak of transactions remained in 2022, while median transaction prices stayed around 1 million euros for both years.

Compared to the apartment and house market, there was no significant decrease in activity in the land market in 2023. While 33 transactions were concluded with plots in 2022, 37 transactions were concluded in 2023. Much of this activity and pricing stability is due to the scarcity of unique plots. More expensive plots must offer privacy and proximity to nature while being easily accessible. Larger plots near the sea or inland water bodies, or those with dense vegetation, are predominantly preferred. Luxury properties are understood to be high-priced residential lands with prices exceeding 250,000 euros. Most transactions at this price range are concluded in Tallinn in areas such as Pirita, Nõmme, Kakumäe, and the so-called “golden circle” municipalities. In some cases, properties with such final prices can also be found in administrative units farther from Tallinn, such as in the town of Keila, in the municipalities of Western Harju and Kuusalu.

The median transaction price was 315,000 euros in 2022 and slightly higher in 2023 at 335,000 euros. Half of the transactions fell between 296,000 and 452,000 euros based on two years of data. In 17 transactions, the final price was at least 500,000 euros, and in 8 transactions, the final price was at least 1 million euros.