Rail Baltica delay has not affected Pärnu property market

The postponement of Rail Baltica’s completion has yet to affect Pärnu’s property market, real estate agents told ERR, saying the news is too recent. Projects already under way are continuing as planned, while local businesses and residents hope the revised deadline will hold and trains will run from Pärnu to Tallinn in 2032.

Rail Baltica’s completion date has been postponed before, and investors have factored that into their plans, said Ingmar Saksing, an agent at LVM real estate agency. He said interest was growing in the area where a terminal is planned, as has happened around Ülemiste in Tallinn, and that property prices and demand there were higher than elsewhere.

A spa hotel called Part is due to open on Pärnu beach by next autumn, adding 450 hotel places to the city. The railway delay has not changed the development plans, said project manager Sari Sopanen, although a Rail Baltica connection would help increase the number of customers. A link to the international airports in Tallinn and Riga would be a significant benefit, she said.

Property prices in Pärnu have risen steadily, by 2 to 3 percent a year over the past decade when inflation is included. The delayed railway has not caused major price increases or declines, said Terje Võrk, an agent at Arco Vara real estate agency. People consider other reasons when deciding to move, she said, adding that some passengers might travel to Pärnu during the day and return home in the evening rather than move to the city.

New apartment buildings have been built in several parts of Pärnu in recent years. Saksing said the additional supply was welcome, and estimated that about 400 apartments were under construction or on the market. At the current sales pace, they could take up to two years to sell, provided no more are added.

Sopanen said it was strange that a city the size of Pärnu had been without a train service for nearly a decade and that construction was now being pushed back by several more years. She also said that building costs were unlikely to be lower in the future, and that having a schedule, a plan and funding in place would make construction cheaper now than in a few years.