Peep Sooman, sales partner at Pindi Kinnisvara, said that the prices of standard apartments in Tallinn's high-rise districts have fallen by as much as 20 percent, and demand is expected to stay slow for a while.

"The market has seen a spike in the overall amount of offers but the level of demand is low because people's confidence is low. It seems that we are sliding down the slope and we still have a ways to go," he said.

Sooman said that new developments have seen a lesser price drop, even though fewer apartments are being put on the market than in the past.

"It is possible to put new developments on hold for some time or not bring them to market at all. We see that many developers have put the brakes on their projects and are not even beginning to build anything new, which maintains reasonable stock levels," he said.

"Some of the larger developers, who offer more reasonable prices, are still building, so what is for sale is what is currently under construction from them or will soon be completed," Martin Vahter, chief executive officer of 1Partner Kinnisvara, said. "However, there is a gradual depletion of existing offers."

The market has shown signs of recovery compared to the beginning of the year and that the price decline has remained between 10 and 15 percent, Vahter said.

"Prices are down less than anticipated," he said. "A major drop in housing market has been avoided and people meet their mortgage commitments with relative ease," he added.

Borrowing has nearly doubled since the beginning of the year. "Volumes are lower than last year, but the average loan amount has climbed from €113,000 to €120,000, Anne Pärgma, Swedbank's head of housing loans, said.

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