Real estate company: Scandinavians, Russians leaving Estonian market

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

Finns, Swedes and Russians are all sharply pulling out of the Estonian real estate market, according to a recent analysis by real estate company LVM Kinnisvara.

Over the past 12 months, Swedish residents sold six times as many properties in Estonia as they bought, Finnish residents twice as many as they bought and Russian residents nearly 60 percent more than they bought, according to an LVM press release.

"Scandinavians bought up real estate in Estonia when it was cheap," LVM Kinnisvara board member Ingmar Saksing. "Now they're selling it at significantly higher prices to Estonians and pulling out of our market."

While Swedish residents have been in the process of withdrawing from the Estonian real estate market for some time already, the Finnish and Russian U-turn has largely been limited to the last decade.

In 2012, when the Estonian economy was cautiously recovering from the global economic crisis, Finnish residents were buying real estate at 1.5 times and Russian residents nearly three times the rate they were selling.

"Among residents, in addition to private persons, are businesses as well, due to which the registration of real estate under Estonian businesses may be at play, especially when it comes to statistics regarding Russian residents," Saksing explained. "The Finns, however, are withdrawing money from our housing market due to both generational change and our high price levels."

He noted that among those selling their Estonian real estate are Finns who had purchased homes for retirement in Estonia back when prices were cheap but, upon approaching retirement age themselves, have decided they would prefer to stay in Finland.

"Estonia isn't as attractive to the younger generation of Finns, as prices are comparable to Mediterranean real estate," Saksing added.

According to LVM, Finns account for by far the largest share of foreign residents on the Estonian real estate market; over the past 12 months, they purchased 1,155 and sold 526 properties in Estonia.

Scandinavians are most rapidly withdrawing from the real estate market in Western Estonia and Tallinn; the Russian exit has been sharpest in Harju County.


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Editor: Aili Vahtla

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