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Thinking about buying a 3-bedroom apartment in Tallinn's Old Town? It’s a great area, but you're probably wondering: is now the right time to buy, or should you wait for prices to drop?
And what about long-term investment—should you look into other districts like Kalamaja or Pirita where property values might appreciate more over time?
In this article, we’ll answer these questions. We know this market quite well - and we have put all our knowledge in the Estonia Property Pack.
Will property prices increase in Estonia in 2025?
Yes, property prices in Estonia are expected to rise in 2025, driven by a combination of economic growth and increasing demand for housing.
Backed by our fresh, in-depth market analysis, we’re confident that Estonia remains an attractive market for both domestic and international investors.
While there are challenges such as inflation and potential interest rate hikes, the underlying factors supporting Estonia's property market growth are strong.
Demand, particularly in urban areas like Tallinn, continues to outpace supply, making significant price declines unlikely. Additionally, Estonia's growing tech sector and favorable business environment continue to attract new residents and investors.
Signals pointing to a property price increase in Estonia
Here are some factors suggesting prices could increase:
Estonia's economy is projected to grow steadily in 2025, boosting consumer confidence and increasing the purchasing power of potential homebuyers, which is likely to drive up property prices.
The ongoing development of infrastructure projects, such as improved transportation networks, is expected to enhance connectivity and accessibility, particularly in urban areas, making these locations more desirable and potentially increasing property values.
A shortage of new housing developments in key areas is anticipated, which will likely lead to increased competition for existing properties, driving up prices as demand continues to exceed supply.
Estonia's tech industry is expanding rapidly, attracting a growing number of professionals and expatriates to cities like Tallinn. This influx of skilled workers is expected to boost demand for housing, particularly in urban centers.
Government initiatives aimed at promoting sustainable and energy-efficient housing are expected to increase the value of properties that meet these criteria, contributing to overall price growth in the market.
Signals pointing to a property price decrease in Estonia
Here are some factors suggesting prices could fall:
Potential increases in interest rates could make borrowing more expensive, reducing the affordability of mortgages for some buyers and potentially dampening demand.
Rising inflation and living costs may strain household budgets, limiting the ability of some buyers to enter the property market, particularly in the lower and mid-tier segments.
Economic uncertainties in the broader European market could impact investor confidence, leading to a more cautious approach to property investments in Estonia, which might slow down price growth.
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If property prices go up in Estonia, how much would they increase by?
If real estate prices in Estonia were to rise in 2025, the increase would likely be between 3% to 7% of their 2024 values.
Typically, real estate in emerging markets like Estonia appreciates by approximately 3% to 7% annually over the long term. However, fluctuations can occur depending on factors such as region, season, and property type.
It means that, if you spot a charming 2-bedroom apartment in Tallinn for 150,000 euros today, don't be surprised if it's priced between 154,500 and 160,500 euros this time next year.
To give you a better understanding, here is a table that shows 7 types of Estonian real estate properties, their estimated prices in 2024, and projections for 2025 based on potential price increases of 3%, 5%, and 7%.
| Type of Property | Average Price in 2024 (€) | Price in 2025 (3% increase) | Price in 2025 (5% increase) | Price in 2025 (7% increase) |
|---|---|---|---|---|
| Apartment in Tallinn (60 sqm / 646 sqft) | €150,000 | €154,500 | €157,500 | €160,500 |
| Modern Apartment in Tartu (75 sqm / 807 sqft) | €200,000 | €206,000 | €210,000 | €214,000 |
| Luxury Penthouse in Pärnu (100 sqm / 1,076 sqft) | €400,000 | €412,000 | €420,000 | €428,000 |
| Studio in Narva (30 sqm / 323 sqft) | €50,000 | €51,500 | €52,500 | €53,500 |
| Loft in Viljandi (80 sqm / 861 sqft) | €120,000 | €123,600 | €126,000 | €128,400 |
| Townhouse in Rakvere (150 sqm / 1,615 sqft) | €300,000 | €309,000 | €315,000 | €321,000 |
| Investment Property in Kuressaare (50 sqm / 538 sqft) | €100,000 | €103,000 | €105,000 | €107,000 |
Everything you need to know is included in our Property Pack for Estonia
If real estate prices go up in Estonia, which areas are likely to see the biggest increases?
Today, people who want to move to Estonia are looking for a blend of historical charm and modern amenities, which Tallinn Old Town offers. Hence, we could see a price increase there in 2025.
Additionally, there's been a growing interest in vibrant, youthful neighborhoods, and Kalamaja has really taken off.
We like it when information is clear and easy to digest. So, here’s a table that highlights the areas where prices might rise the most, along with the reasons behind those expected increases. It’s very high-level. If you want more details on a specific area, please check our real estate pack tailored to the Estonian market.
| Neighborhood | Level of Increase | Why |
|---|---|---|
| Tallinn Old Town | High | Recent restoration projects and its increasing appeal to international buyers as travel normalizes post-pandemic, driving demand. |
| Kadriorg | High | Expected rise due to limited housing stock, upcoming renovations to heritage buildings, and growing demand for prime properties in central Tallinn. |
| Kalamaja | Medium-High | Ongoing gentrification and new transport links, along with several planned redevelopment projects in the area, are likely to push prices higher. |
| Ülemiste City | Medium | The shift towards hybrid workspaces is driving demand for residential properties near business districts, combined with new mixed-use developments. |
| Pirita | Medium-High | Eco-friendly urban projects and recent construction of new schools and parks are increasing its attractiveness for families, pushing prices upward. |
| Nõmme | Medium | Investment in local infrastructure, such as the extension of tram lines and renovation of historic areas, is boosting long-term value. |
| Telliskivi | Medium-High | With new cultural and commercial spaces being developed, this trendy neighborhood is seeing increased demand from both residents and investors. |
| Rocca al Mare | Medium-High | Its proximity to Tallinn, along with new office and residential developments, makes it increasingly attractive to professionals seeking more space. |
| Tartu City Center | High | As new luxury developments are launched, demand for premium housing among wealthy buyers is expected to further increase property values. |
| Pärnu Beach Area | High | Upcoming restoration of historic sites and high-profile cultural projects are driving a renewed focus on this central, historic location. |
If I'm looking to invest in real estate, what types of properties should I focus on for the best value appreciation in Estonia?
In 2025, Estonia's real estate trends focus on tech-smart, energy-efficient apartments, larger suburban homes for families, properties with outdoor spaces, and eco-friendly buildings—all driving higher demand and prices. Here is a summary.
- Tech-Equipped and Energy-Efficient Apartments:
Driven by Estonia's strong digital infrastructure and sustainability trends, these homes offer smart technology features and energy-saving systems. They cater to young professionals and tech workers, making them a hot commodity in 2025.
- Family-Sized Apartments in Suburban Areas:
With a growing demand for larger living spaces, especially among families, suburban areas near Tallinn and Tartu are seeing increased interest. Proximity to green spaces and schools is a major factor driving value.
- Properties with Outdoor Spaces:
Post-pandemic, outdoor spaces like terraces, balconies, or gardens have become highly desirable. In cities like Tallinn, these features offer a much-needed escape and are likely to drive up property values.
- Eco-Friendly Buildings with Low Carbon Footprints:
Estonia's commitment to sustainability is boosting demand for eco-certified buildings. Buyers are increasingly valuing properties that align with the country's green goals, leading to price appreciation in this category.
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