According to statistics analyzed by Pindi Kinnisvara, the number of secondary market apartment listings since the beginning of the year has increased by 46 percent in Tallinn, 36 percent in Tartu, 46 percent in Pärnu and 55 percent in Narva.

Throughout Estonia, the number of used apartment listings has risen by 38 percent since the beginning of the year.

Listings for houses and residential plots have increased by more than 20 percent.

Peep Sooman, a sales partner at Pindi Kinnisvara, said that such numbers were not seen even at the peak of the COVID-19 crisis, when buyers disappeared from the market, causing a spike in listings.

"Since buyer confidence remains low, the number of listings is continuously growing, and demand is lower than the increasing supply," said Sooman. "This could mean a new wave of price corrections in the second half of the year, as sellers will need to make their properties very attractive. As we know, price is the most attractive parameter."

Sellers should expect longer selling times, according to Sooman.

"Those wishing to sell should prepare for much longer sales periods, especially for typical properties, where active price negotiation is already underway. If the owner doesn't agree with the offered price, the buyer will simply move to the next building to find a similar property, and somewhere they will manage to negotiate the price down," explained Sooman.

Sooman mentioned that it has become a buyer's market, where sellers have very little say, and the days of bidding wars are over.

"Sellers of new apartments are in a somewhat better position, as many development projects have been put on hold, and therefore the stock of available apartments has not increased significantly," added Sooman.

According to Pindi Kinnisvara, at the beginning of the year, there were nearly 5,000 secondary market apartment listings in Estonia, but by May 20, the number of listings had grown to over 7,000.

Arco Vara executive manager: More listings a return to normalcy

According to Mihkel Eliste, analyst at Arco Vara, their data indicates that secondary market listings in Tallinn have increased by 37 percent since the beginning of the year, while listings in Harju County outside of Tallinn have grown by 16 percent.

In Tartu, Arco Vara data shows a 44 percent increase in the secondary market since the beginning of the year, with a 43 percent increase in Tartu County outside of Tartu. "It is not entirely clear why there is similar dynamics in and around Tartu; it may be a lag effect compared to consumer behavior changes that have already occurred in Tallinn," added Eliste.

Elari Tamm, CEO of Arco Vara real estate agency, said that the increase in the number of listings can be seen as a return to normalcy and sustainable in terms of competition.

"The number of listings in Estonia has grown following a significant shortage in 2021-2022, when the volume of listings fell drastically. If today there are over 5,000 apartments for sale in Tallinn through major portals, in 2022 it dropped to almost below 3,000 listings. This resulted in a significant price increase and a sort of vacuum. The current increase in the number of listings can be seen as a return to normalcy and sustainable in terms of competition," said Tamm.

Tamm also noted that a buyer's market has emerged, giving buyers options and the ability to negotiate prices.

The sales period has lengthened over the past year and a half, and price reductions to find buyers have become unavoidable, he added.

"However, prices have not significantly dropped over the past year and a half, with median prices in the secondary market falling by only a few percent. The pressure to sell has increased, and there is greater interest in completing transactions, but the most significant impact of the increase in the number of listings has been primarily the longer sales period," said Tamm.

Uus Maa board member: Price drop difficult to forecast as interest rates have stopped growing and consumers have adjusted

Igor Habal, a member of the board at Uus Maa, stated that compared to a year ago, the number of listings has increased by 18 percent in Tallinn (25 percent since the beginning of the year), 20 percent in Tartu (14 percent since the beginning of the year), 41 percent in Pärnu (29 percent since the beginning of the year) and 48 percent in Narva (24 percent since the beginning of the year).

He noted that it is always sensible to compare similar periods to avoid seasonal variations – there are always fewer listings in winter than in spring and summer.

Habal added that, according to his data, the number of new development listings in Tallinn has increased by 18 percent, so he considers the reported 46 percent increase in Tallinn and 36 percent increase in Tartu secondary market listings to be somewhat optimistic. "However, I tend to agree with the growth figures for Pärnu and Narva, provided we are comparing them to the same period last year," he added.

Habal also pointed out that the number of listings has increased, and so have the sales periods, as the number of active listings has grown within the total offerings.

"Predicting a price drop is challenging because the rise in interest rates has ended, and consumers have adapted to it, as indicated by the increase in transaction numbers and price stability. Additionally, there are very few loans in arrears, and the labor market is very strong. Since real estate prices have not significantly grown over the past two years, the rapid inflation has led to a real decline in property prices, which has also improved the affordability of real estate," said Habal.

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