At the moment, there are a lot of properties on the market but few buyers.

Data from the Land Board show real estate transactions have fallen by 13 percent year-on-year.

Real estate analyst Tõnu Toompark said the price drop is connected to a smaller number of new apartments being sold. At the same time, the number of offers is growing faster than requests.

"Today, if you look at an equivalent apartment in Tallinn, the price is more or less at the same level as a year ago, a few percent here and there is rather a measurement error," Toompark told Tuesday's "Aktuaalne kaamera".

"The number of people in the market ready to transact has decreased, while supply has increased. Supply has been increasing rapidly for the last six months. This is keeping downward pressure on prices. We cannot talk of any recovery in prices any time soon," he added.

Uus Maa board member Igor Habal said: "Perhaps we have been a little over-optimistic about the speed of recovery in the property market, which is why we see no improvement likely this year. Compared to last year, there has been both a slight fall in prices and a fall in the number of transactions. We see that if people want to buy, sellers have to make concessions on price."

A small indication of the revival of the market can be seen in the fact that people's interest in home loans has increased.

"If you compare last year with June this year, the number of applications has increased by around 12 percent. If we also take the first weeks of July, the increase is slightly higher. Loan amounts have increased by 5 percent compared to last year, and the average loan amount is now €133,000," said Anne Pärgma, head of housing loans at Swedbank.

However, the already fragile real estate market could be hampered by the government's new planned tax increases, which leave people with less money to buy a home.

"It is not only the income tax that is affected, but also VAT, which has an impact on the market for new developments. Buying a home is getting more expensive, you can buy less expensive goods. Square meters have nowhere to go but down. Some transactions will be canceled due to tax increases," Toompark said.

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