MoneyHub interviews with Ruslan Gulida Real Estate Professional & Partner at RE/MAX Estonia

Is it a good time to buy property?

MoneyHub interviews with Ruslan Guilda Real Estate Professional & Partner at RE/MAX Estonia 

MoneyHub is privileged to be in conversation with Ruslan Guida, a highly respected Real Estate Professional and Partner at RE/MAX Estonia, whose insights and expertise are invaluable in understanding the Tallinn real estate market.

MoneyHub’s analysis of the residential sales market in Tallinn for the first six months of the year revealed a reassuring trend. Despite a slowdown in sales, the property turnover and value remained relatively stable, not significantly different from the previous year. However, there was a 7 % drop in SQM regarding value, which we will further explore.

What do you think is driving these figures?

There are lots of new build contracts that were signed 1-2 years ago that are now coming to term. These contracts typically involve a deposit being paid upfront, with the final payment due upon completion. However, the buildings are still in the process of being constructed, so the final payments are being made, and the building has finally been sold. These transactions are artificially inflating the numbers. The drop in the secondary older market tells a different story; this has dropped around 10-15% depending on the quality of the stock and the heating grade, which makes a big difference.

What about the supply of new builds? Have developers stopped new developments?

Many property developers have moved their operations out of town, where land is cheaper, allowing for more significant developments. Which are more economical ways of working. In the centre of Tallinn, there are now fewer available land plots, so supply is starting to shorten. However, quite a few are still available around the town, so potential buyers have a good choice.

What advice would you give developers and sellers if they can’t sell?

Be reasonable with your expectations and wait. You could consider renting, but the rental market isn’t that buoyant, so your income may not cover your costs. If you’re sitting on a newly restored property, you may devalue it. There are buyers looking for apartments with good tenants as an investment. So it’s not always a disadvantage.

What about the financial situation?

Banks are competitively lending, for example, providing rates as low as 1.35% + EURIBOR. So, if your personal finances are in good shape, you may consider it. Also, the changes made on 1st April, which allowed the borrowers to increase their lending, have brought more buyers into the market. (The Bank of Estonia reduced the limit on borrowing requirements by 2%.)

MoneyHub thanks Ruslan for his time and insight.

So, is now a good time to buy?

MoneyHub’s recommendation is clear: With around 50% more properties on the market than last year, buyers have a better choice and a better chance to find a good deal. The recent drop in property prices may have reached its bottom limit, and Estonia’s small size allows for a relatively quick recovery. While the EURIBOR rate dropped recently, inflation remains stubbornly high, indicating no significant change soon. Some sellers have significant issues and need to sell. We strongly advise doing thorough research and monitoring the market closely before committing to a purchase, empowering you to make informed decisions.