Market review July 2018

An extraordinarily warm and dry July that was a vacation period for many people brought along a decrease in the number of transactions in comparison to the two previous months. About 200 transactions less than in May or June were concluded in July. However, in comparison to last July, the number of transactions increased by nearly 50. In total, 1,806 transactions were concluded in July, the median price of the transactions was 1,264 EUR/m2 (lower again in comparison to the past two months but +2,3% in comparison to last July). In total, the first seven months of year 2018 have been more active than those of last year, even though the development has been regionally different. In comparison to the first seven months of last year, over 400 transactions more were concluded, the median price of transactions increased by 11.2%, remaining at 1,337 EUR/m2.

The statistics of the number of transactions show that outside larger cities the reduced population has negatively influenced the number of transactions in spite of the improved economic environment, and a limit has been reached beyond which the number of transactions will not reach if the present developments persist. In comparison to the same period last year, the number of transactions dropped in eight counties; over 50 transactions less were concluded in Rapla and Pärnu Counties. Next to Harju and Tartu Counties where the number of transactions increased by 409 and 115, respectively, also Järva, Lääne-Viru and Põlva Counties stood out where the number of transactions increased by at least 30. However, namely Harju County was the one where the number of transactions dropped in July. In the rest of the counties the number of transactions increased by 33 whereas in Harju County 227 transactions less were concluded.

Unlike the number of transactions, the growth in the median price was extensive: in comparison to the same period last year, the median price of transactions increased in ten counties. Even though the better part belongs to new developments still dominated by Harju County, changes have taken place also in the secondary market where the price increase does not give reason to talk only about the influence of new developments. Of larger counties, the median price of transactions increased in July only in Pärnu County (+10,1%) reaching nearly 1,100 EUR/m2; in Harju and Tartu Counties, after a couple of nearly record-breaking months, a slight decline of a few per cent could be observed. The median price was highest in Harju County (1,669 EUR/m2) where the prices increased by 7.5%, followed by Tartu County (1,312 EUR/m2) and Pärnu County (994 EUR/m2) – in the latter two, the prices increased over 9%.

In Tallinn, compared to June, about 150 transactions less were concluded in July, which contributed significantly to the decline in the number of transactions all over Estonia. As the volume of new developments decreased, compared to June, the median price of transactions dropped by 3.5%. As a whole, during July, 708 purchase and sales transactions were concluded in Tartu, with a median price of 1,736 EUR/m2. In the comparison of years, the market of Tallinn has continued to grow – in the first seven months of the year, 5,700 transactions were concluded in the capital, and the median price of the transactions was 1,747 EUR/m2. In comparison to the same period last year, the number of transactions increased by 6.0% and the median price by 7.6%. If the number of transactions has mainly been increased by the growth in the volume of new developments, both the apartments of the secondary market and those from the first-hand sale have more or less equally contributed to the increase of the median price.

July was extraordinary also in the sense that the number of transactions dropped virtually in every city district in comparison to June. The figure only increased by two in Mustamäe. The largest number of transactions in the first seven months of the year could be observed Lasnamäe district where 1,434 transactions were concluded, which was 199 transactions more than the year before. In comparison to the same period last year, over 100 transactions more were concluded in Kristiine (+136) where the development of former Tondi barracks played a significant role in increasing the number of transactions, and in Haabersti (+103) where next to the established areas, active development is taking place in former industrial and scrubland areas. Of larger city districts, a noticeable drop in the number of transactions could be observed only in Northern Tallinn (–48) where the volume of new developments has somewhat decreased.

Similarly to the drop in the number of transactions, the median price of the transactions in city districts was rather on the negative side – Nõmme and Northern Tallinn showed a slight increase of a couple of per cent, the rest of the city districts remained close to zero or dropped over 5% (Haabersti, Pirita). In the first seven months of the year, however, the growth in the median price was still strong – only in Nõmme district the median price increased less than 1%, whereas in Haabersti and Northern Tallinn, the price increase exceeded the line of 10%. The median price was highest in the Centre (2,328 EUR/m2) and lowest in Lasnamäe (1,570 EUR/m2).

In comparison to Tallinn, July was active in Tartu. In comparison to June, only 8 transactions less were concluded, the median price dropped by 2% but both figures were close to the peak of the market. In the comparison of years, mainly due to the increase in the volume of new developments, the number of transactions in the first seven months has increased by 170, the median price of the transactions increased by 9.1% and similarly to Tallinn, the contribution comes from both new developments and the apartments of the secondary market.

In Pärnu, 70 transactions were concluded in July, the median price of the transactions reached very close to the top, reaching 1,268 EUR/m2. In comparison to June, both the number of transactions (+13) and the median price (+13.4%) increased. In the comparison of years, based on the first seven months, the number of transactions has still somewhat decreased (–30), the median price of the transactions has continued to grow similarly to last year, supported by the general price increase (+13.1%).

Narva that has drawn bigger attention than before due to the movement of the president’s office and various cultural initiatives has still not managed to bring any positive news into the real estate market, regardless of the somewhat lower unemployment and a slowed decrease in the number of the employed. July was more active than average with 72 transactions but the median price of the transactions was only 341 EUR/m2, which is slightly under the level of past years. In the first seven months of the year, 37 transactions less than last year were concluded in Narva (441→404), the median price of the transactions remained virtually at the same level (400 EUR/m2).

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