According to the statistics of the Kinnisvara24 real estate portal, the rapid rise of the Euribor index and the high real estate prices in the Estonian capital have made people in Harju County look for a home outside of Tallinn, where real estate prices are up to five times lower, depending on the settlement.
The CEO of Kinnisvara24, Urmas Uibomäe, said the habits of home seekers have changed and today they are faced with the choice of risking ever-increasing loan payments or making some concessions and moving out of the city.
“We can see the choice of region is more and more often expanded from Tallinn to Harju County also in the search engine of the portal and ads for real estate outside Tallinn are opened more often,” he said.
According to the real estate portal, the growth of the Euribor (that the mortgage interests are based on) is not expected to slow down with the continued interest rate hikes of the European Central Bank.
Therefore, home seekers are in a situation where, compared with the loan payment, it is more advantageous to take into consideration a longer commute time in the morning and look at real estate a few dozen kilometres away from the capital instead.
Even Tallinn’s suburbs are considerably cheaper than the capital
While the average price per square metre of residential real estate in Tallinn is €3,282, then in Loksa, which is located an hour’s drive from Tallinn, one can find a home almost five times cheaper, meaning the average price per square metre is €663.
In the rural municipalities of Saue and Kose, located next to Tallinn, real estate is for sale at an average price of €1,390 to €1,486 per square metre.
Although new developments make up a large part of the advertisements in Tallinn, then even when excluding new developments, the price per square metre in Tallinn remains around €3,000.
According to Uibomäe, similarly to Tallinn, many new developments have come up for sale in nearby municipalities and very good public transport connections have also developed.