Estonian realtor Uus Maa said Wednesday morning that, according to their data, both apartment prices and the number of transactions across Estonia fell in September.

The volume of apartment transactions fell by 21.6 percent between August and September; the median price by 8.8 percent over the same period, Uus Maa found, based on analysis of statistics from the Land Board (Maa-amet).

Uus Maa analyst Risto Vähi noted that while transaction activity usually increases after the end of the holiday period, ie. in September, this year the market was affected by several factors which gave rise to the opposite effect. 

Vähi said: "People now have a wait-and-see attitude, and the focus is more on other purchases than that of a new home. The biggest impact has been on utility costs, and before making major decisions, they want to see the first, more appealing heating bills. In addition, the growing Euribor has become an increasingly important issue."

The impact of the broader political situation also reached the real estate market in September, for the second time this year, Vähi continued.

"Kaja Kallas's warning speech about electricity security and the announcement of the part-mobilization in Russia caused a slight shock. A similar shock had also occurred after the start of the war, in February. At that time, this uncertainty lasted for a month-and-a-half until people adjusted and life on the real estate market went on again. This effect is probably temporary even now, but on the other hand, the winter period, and the accompanying uncertainty about whether there will be sufficient electricity or gas supplies, will still cause great uncertainty. In addition, general inflation, for example in the retail trade, is a concern," Vähi added.

Clicks on real estate sites are, while still present, diminishing, while those who want to get a quick sale in should consider the downward adjustment of asking prices.

In terms of raw figures, in September of this year, 429 transactions concerning residential properties were made in Estonia, 15.9 percent less than in August. 

The number of private house purchase and sale transactions fell by 29 percent in Tallinn, 43.5 percent in Tartu and37.5 percent in Pärnu, but increased by 5.3 percent in Narva. 

The nationwide median house transaction price was €63,000 in September, 10 percent lower than in August.

The number of transactions relating to residential plots across Estonia fell by 19 percent in September when compared with the previous month. 

The median price of residential plots, of €9.65 per square meter, was 24.6 percent lower in September, compared with August

In Tallinn, the number of apartment transactions fell by 20.2 percent, in Tartu by 39.6 percent, in Pärnu by 27.6 percent and in Narva by 1.4 percent. 

The median price of apartments in Tallinn decreased by 0.5 percent compared with August, in Tartu by 14.1 percent and in Narva by 10.3 percent, but increased by 2.5 percent in Pärnu, the only major city where this happened.

Market internationally showing pattern of contraction also

Meanwhile, Finland, too, saw a decline, while daily Helsingin Sanomat reports that the value of real estate developments begun in the next three months will decrease by 15 percent compared to a year ago. At the same time, the number of new projects started will also decrease by six percent.

In Sweden, real estate prices in Sweden fell for the fourth month in a row in September, according to the real estate index published last week, and was the largest fall posted in the nine-year history of that particular index. 

Across the country, apartment prices fell by 1.2 percent and house prices by 1.8 percent. In some regions, the price drop was more than five percent, and in Stockholm, the capital, it was, almost four percent. 

It is estimated that real estate prices will have dropped by up to 20 percent from their peak by next spring, due largely to the increase in base interest rates.

Latvia and Lithuania have been a little more buoyant, though analysts in Latvia see a fall in prices around the turn of the year, while uptake of new apartments in Lithuania is around 6 percent lower than in 2021.

At the same time, apartment prices on the secondary market have increased by 10 percent in Lithuania, Delfi reports.

Further afield in the US, analysts from both Goldman Sachs and Moody estimate that real estate price swill fall by 5-10 percent next year, while the Fitch rating outlook predicts a price decrease of 10-15 percent.

Real estate price falls of these magnitudes are rare in the US, confined to severe downturns such as the Great Depression of the early 1930s, or the crash from 2008.

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