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Analyst: New real estate development prices may fall in 2024

Apartment buildings in a new development in Tallinn. Photo is illustrative.
Apartment buildings in a new development in Tallinn. Photo is illustrative. Source: Siim Lõvi/ERR

While the prices of older apartments have already started to fall, the trend may continue with new developments next year, said Swedbank's Chief Economist Tõnu Mertsina.

Real estate prices were 3.8 percent higher on year in the third quarter of 2023, but growth has slowed down, data from Statistics Estonia show.

The last time Estonia saw growth below this level was in 2016, Friday's "Aktuaalne kaamera" reported.

While older apartments are now cheaper than they were a year ago, Tallinn's new developments have bucked the trend and are still rising in price.

But Mertsina believes the trend may change.

"Transaction activity is continuing to fall and we are likely to see a fall in property prices in the first half of next year. And this could come from the new developments side. /.../ As the economic downturn continues in Estonia in the near term, people's confidence is unlikely to show any signs of improvement," he said.

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Editor: Merili Nael, Helen Wright

Source: Aktuaalne kaamera

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