Tallinn’s new homes cater to buyers trading up

New housing in Tallinn is increasingly aimed at people moving from an existing home, while buyers seeking affordable family homes often look beyond the city, ERR’s “AK.Nädal” reported. Buyers are placing greater value on green surroundings, car-free courtyards and indoor air quality.

A whole floor in Kalamaja’s first high-rise sold for nearly four million euros over the summer, making it Estonia’s most expensive apartment sale. The 340-square-metre home has an almost equally large terrace, with views of the sea and Old Town in good weather.

Property analyst Tõnu Toompark said luxury property sales have become more visible, although deals above one million euros for a residential apartment remain exceptional. About 70% of apartments under development are two- or three-room homes, he said.

Most buyers are not looking for an entire floor, but even a three-room apartment can be costly for someone on an average salary. New-build apartments in Tallinn are priced at more than 5,000 euros per square metre. An 85-square-metre three-room apartment in the Uus-Volta development is available for 460,000 euros; a similar home one floor higher costs nearly half a million. A parking space adds 25,000 euros and a storage unit 8,000 euros, before furnishing costs.

Endover development director Uku Tint said his company had Tallinn’s highest sales turnover among developers this year, while its stock of unsold apartments had also grown. Its customers are often people who already own a home and want to move to a newer home or a better location, he said.

People on an average salary without a home to sell may need to look in Mustamäe or Lasnamäe, Tint said, or beyond Tallinn’s boundary for lower-priced apartments. Reigo Randmets, chief executive and owner of property developer Reterra, said buyers could generally get an extra room in Rae compared with the Hipodroom development.

About 1,000 apartments, a kindergarten and a business quarter are planned for Hipodroom. Randmets said buyers are now more likely to purchase a home for themselves than as a rental investment. The surroundings also increasingly influence their choices: residents want cars directed underground or away from buildings, leaving space for people and children.

Tint said buyers are more informed and look for quality, including good indoor air, fresh ventilation, green surroundings, safe places to walk and nearby sports facilities.

Tallinn wants new developments to attract families and requires a mix of apartment sizes. To reduce construction costs, developers are allowed to build fewer expensive parking spaces. The city’s planning and architecture service head, Kristi Grišakov, said large apartments are often marketed as luxury products and priced accordingly.

Toompark said the picture was not as bleak as property listings might suggest, because wages have recently grown faster than apartment prices. He said the number of average salaries needed to buy a comparable two-room apartment in Mustamäe or Haabersti was about the same as it had been ten years ago.