Number of million-euro or more houses being listed on real estate market

A luxury house in Pirita for €2 million.
A luxury house in Pirita for €2 million. Source: ERR

About 30 sales advertisements are live on Estonian real estate portals where the price of a family house offered on the secondary market, comes to more than one million euros, while other offers are also made through brokers-only. Real estate agents have confirmed that buyers are mainly locals, while the prices of luxury homes have risen, though there are buyers for everything, the agents claim.

Location, location, location - this golden rule of real estate, applies especially to luxury houses costing more than a million, since in a private location, for instance by the sea, the land alone often costs more than than the land and house combined. Almost all of these are located in Tallinn and its environs in Harju County.

However, a location by the sea and close to the capital is not enough on its own to raise prices over a million euros; a number of other conditions must be met. As a rule, these houses have a very large total floor area, an above-average-sized plot, as well as luxuries such as an indoor pool, gym area, multiple vehicle garages, a landscaped garden, and interior decoration using expensive materials.

"Luxury real estate generally includes assets which are in a great location, secondly, with first-class construction materials and quality, and thirdly, with added value, spas, cinemas, swimming pools and all such things," broker specializing in luxury real estate Kairi Vanem said.

"Most of them are for sure located by the coast, with a beautiful view of the sea, or if not, they are large, landscaped properties somewhere inland. Most of this price range still remains confined to Harju County. And for a simple reason - the price of land is highest here."

Among the online real estate portals, many less appealing richly decorated, tasteless, poorly-planned private houses built back in the 1990s stand out as well, however, ERR reports.

Agents say that there the seller has calculated how much money he or she spent on the construction of the house and added an emotional argument to justify the price. These are items that often remain unsold for many years, and even then they may not find a buyer. Such houses can expect offers of more like the half-a-million-euro-mark.

"Sometimes the owner just comes up with a price out of their head and then, at their request, the broker displays it on the portal, which I think is a bit unprofessional," Sveta Petkina, realtor with Ober Haus said. "It still has to be within the limits of reality. Some objects have been overvalued two- or three-fold."

"When a seller starts selling their house, he or she always takes into account what they paid for the property at the time, how much they invested in it; maybe over time they have invested in it, plus a little bit of emotion in his home for the price, and here that price appears," Kairi Vanem said.

However, a well-planned modern house can become a commodity even before its public sale. Sales periods have accelerated; a well-appointed house can be sold in three months. However, for those properties with any fundamental problems - a bad heating system, for instance, or a lack of planning, or a lack of a garage - the process can take more like three to five years.

Agents acknowledge that money has seemed to have lost value in recent years - the price is also being traded less and less for million houses, some sellers are still raising the price during the process if it seems that the buyer is coming too soon.

"The coronavirus period has helped to significantly speed up the sale of real estate, especially houses. Even more complex objects, which also have more fundamental problems, have now been sold," Kairi Vanem said.

"There is not much trading in our society, but there is still a buffer zone. Usually, if you still like the object, brokers recommend that you offer your price," Petkina said.

The generation of luxury homes is undergoing a generational change. Among new buyers, young people involved in start-ups, or those returning to Estonia from abroad whose children are of school age, and who have become millionaires, predominate. The share of Finns and other foreign nationals is marginal. However, the aftermarket for luxury homes is small, Petkina added.

"There are a lot of houses for sale that are 15-20 years old. If in the 2000s everyone needed their own house, then now the children of these families have grown up, moved out and the main question is what are we going to do in this huge house, just the two of us," Petkina said. Plus, standards are different, more demanding, today.

"It is already taken as read that each bedroom should have its own en suite bathroom, wardrobe, even in apartments. But it is very difficult to rebuild old houses along these lines," Petkina said.


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Editor: Roberta Vaino

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