Toompark: Demand in rental market will remain low this autumn

Houses in Tallinn
Houses in Tallinn Source: Siim Lõvi /ERR

Tõnu Toompark, a member of the board of the Real Estate Companies Association, said in Vikerraadio's morning program the peak demand for rental apartments, which usually arrives in August-September, will be lower this year due to the effects of the coronavirus and the decline in the number of foreign students.

Toompark noted: "August is the most popular period of the year in the rental market in Estonia. The number of tenants this year will be lower, the higher demand will not last until October, but will end in September."

Many foreign students from third countries will not arrive in Estonia this year, and there are already fewer migrant workers.

Toompark explained: "Students are an important factor in the rental market. Their cancellation is a strong decadence in the market. The same is for migrant workers who do not buy housing."

The effects of the coronavirus spread reached the Estonian rental market immediately in March and rental prices fell by 10-20 percent.

Toompark said: "The owners have bought more rental apartments than there is a number of tenants. And the coronavirus pandemic changed it even more suddenly. The rental market is now clearly a buyer's market."

The effects of the corona on real estate purchase and sale prices are approaching with reference.

Toompark added: "The marginal decline in real estate prices will continue in the second half of the year. It depends on unemployment and economic growth. I do not want to over-dramatize it. The 50 percent drop in property prices as we saw in 2009 will not come."

According to Toompark, they are accepting the more difficult times are coming and the market participants are rather optimistic. He added: "The main question is about the marketability which is the number of the transactions. The number of transactions in June was a positive surprise for us."


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Editor: Katriin Eikin Sein

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