"Real estate prices have gone straight up since 2009," Toompark told Vikerraadio's morning program "Vikerhommik" on Wednesday. "But there is always the inflation component, on the other hand, wages in Estonia have gone up 6 percent in the last decade and then some. Growth in income and wealth has been the main driver of real estate prices. I do not see a drop for 2022, because there is the danger of inflation and demand is high."

The average price per square meter in Tallinn is €2,685, but real estate is acquired in all parts of Estonia in different kinds of price ranges. People buy first and second homes and rental investments also play a large part.

"There are more IT millionaires who are not buying themselves homes, but are making rental investments and real estate investments on a larger scale," Toompark said of the people buying some of the more expensive real estate in Estonia.

The analyst noted that the average Estonian wage is enough to buy the average Estonian apartment - a two-room apartment in a five-story or nine-story building in Mustamäe. "The average apartment is not a development by Merko in some great location," Toompark added.

He said that the released second pillar pension funds are not enough to acquire apartments, but it does help if the person has saved up a little themselves. "There are still more buyers than there are offers. Are there more residents than there are offers, that is another question."

Although Lasnamäe is the most populated district in Tallinn, there are very few new developments there. The most popular area for development is Haabersti and people have begun to appreciate real estate on the shores of Tallinn Bay. "Clearly, the hotter and sexier areas are around the sea. We are talking about Kalamaja and then moving toward Kopli on the coastline," Toompark noted.

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