Rental apartment prices top pre-crisis levels

Apartment buildings in Õismäe.
Apartment buildings in Õismäe. Source: Siim Lõvi /ERR

The prices of rental apartments were up 12 percent year-on-year in October, which means prices have climbed even higher than they were before the coronavirus crisis. Experts do not believe energy price inflation will bring rental prices down.

Data from state agency Statistics Estonia shows that the rental market in Estonia reached pre-crisis levels in August. In October this year, the rental market expanded 5 percent compared to October 2019.

Rental prices for October were up 11.7 percent year-on-year. "There was a large drop because tourists and short-term renters disappeared and all short-term rental apartments ended up on the long-term rental market," said real estate agency Uus Maa analyst Risto Vähi.

Short-term rental apartments ending up on the market also brought forth a significant drop in prices. "It was between 10-30 percent, according to different sources. Now, if we look at years to come, the rental market has recovered to the level it was at before the Covid crisis," said Lumi Capital business manager Reeli Simson.

Demand for rental spaces is almost as active as in 2019, data from Uus Maa showed. At the same time, electricity and gas prices doubled from last year, which could lead renters to leave apartments that are heated using electricity or gas, Risto Vähi said.

"It will not make anyone look for a new place to live right away, people must live with the fact. And it is certainly a situation where discussions must be had, it can not be a one-sided decision," Vähi noted.

Reeli Simson said heating prices will not bring prices down as a whole, as demand for rental apartments is very high. "We see people researching, queuing up. This demand and interest is so great that there is no price drop expected. I certainly see no major rental price increase, monthly consumption costs are more likely to go up," Simson said.


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Editor: Kristjan Kallaste

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