Overview of the residential real estate market in Tallinn

This is the followup of the previous post, where we have compared 1-and 2-room apartments for the best investment possibilities. As a result of the analysis, based on the data collected from KV.EE for the month of September, the top investing opportunities with the highest ROI were 2-room apartments in Mustamäe and Lasnamäe.

What about the rest of the city, how different will the findings be if we consider adding 3- and 4-room apartments to equation? First of all I would think that the market for renting out 3- and 4-room apartment is small, considering most people looking for biggest place to leave are opting for a buying it rather than renting out. Once again, the data should prove this theory right or wrong.

Analysis

ap_rent_1

As it was predicted, the majority of properties available for rent are 1- and 2-room apartments. The largest number of offers are 2-room apartment in City Center – over 230 individual ads were added in September, offering these apartments for rent. There virtually no offers for affordable 3-and 4-room apartments in Lasnamäe and Mustamäe, howether there is some luxury offers in the City Center.

Another interesting fact, is that buying a 3-room apartment as an investment in Lasnamäe/Mustamäe is a waste of money, as their rent rates are virtually the same, as for a 2-room apartment. However they are a good long term investment, as a family home, as they are being offered at the cheapest price per square meter (see the chart below).

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Another good option to consider is purchasing a 3-room apartment in Haabersti. The prices there are only about 100-150€ higher per square meter than in Lasnamäe/Mustamäe, but the area has always been considered to be more prestigious and holding value better.

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