Estonian Real Estate Market - 3Q Commentary

Economy

Estonian GDP fell 16.6% (year-on-year) in Q3. Demand for commercial space continues to decline due to decreasing consumption, cost cuts and bankrupts. Especially have increased offers with properties in secondary locations.

Offices

Office rents fell 10% in Q3 vs the previous quarter. In the city centre the vacancy rate is 20% and rents for modern office space range from 130 – 250 EEK (8.30 – 16.00 EUR) per square meter. But offices in older buildings can be leased from 50 EEK (3.20 EUR) per square meter in the city centre. (...)

Apartments in Tallinn

Compared to the top in spring 2007, prices in Tallinn have fallen 50%. The number of transactions fell 55% and the total volumes 75%. Compared to the same period last year, the number of transactions fell 20% and the volumes 50%.

Moderate price decline continued in 3rd quarter, although the amount of apartments for sale decreased and number and volume of transactions increased. According to statistics the average sales time extended and the offer prices continue to decline. Many potential sellers have withdrawn their objects from listings, because they see no possibility to get the price they wanted.

In 3rd quarter the market was affected by several large block transactions, which were made with prices lower than average. (...)

Click here to read the whole 3Q 2009 Estonian Residential Market Commentary