Real Estate Prices In Estonia See Fall In July 2012

According to a recent article in the Estonian Press Digest from News2Biz, July 2012 saw something of a fall in real estate prices in Estonia as a whole, but at the same time real purchasing power (in Tallinn) for those wishing to purchase property also fell.

Citing real estate giant Pindi Kinnisvara‘s index as falling by 5.4 per cent between June and July, the report also stated that the real purchasing power of a Tallinn resident earning an average wage would stretch to a property of 68 square metres in area.

The Pindi Index is based on the weighted average transactions across the 17 largest Estonian towns (Tallinn is of course the largest with over 400 000 inhabitants, whereas 17th placed town is Kiviõli in Ida-Virumaa with only a little over six and a half thousand souls).

The average price of apartments per square metre in June 2012 for the whole of Estonia was 886 Euros, falling to 838 Euros per square metre in July, according to the report.

Not surprisingly the lower prices were accompanied by a somewhat higher rate of transactions – 991 in July, compared with 934 the previous month (this only covers the 17 cities incorporated in the Pindi index) the report stated.

According to the article, residents of Tartu and Pärnu can stretch to apartments a little larger in size when measured by their purchasing power levels (at 73 and 84 square metres respectively).

The Pindi Index reached an all time peak in April 2007 at the height of the boom, and an all time low in July 2009 (624.2 Euros per square metre).

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Where To Buy In Tallinn, Estonia?

First published on this blog on July 21, 2012.

People often ask us what the up and coming areas in Tallinn are. What’s going to be the next hot spot to buy an investment property with a potential for strong growth and consistent cashflow from rentals?

We don’t have a crystal ball of course – and nobody does, not one that is effective anyway – but based on the empirical evidence of what has been happening in the couple of years of recovery since the slump we can make a sensible forecast.

City Centre and Old Town

First, the Old Town (see map 2 below) will continue to hold its value. It is a UNESCO world heritage site, hugely popular with tourists, well supplied with a variety of good quality restaurants, cafes, bars, craft shops, high end clothes shops and other amenities, and is close to the harbour not to mention the seat of Governmental power. What’s more people actually live and work there.

The ‘Kesklinn’ (City Centre, also called the ‘Südalinn’) similarly will retain its prominence and, whilst prices took a greater bashing here during the 2008-2010 slump than in the Old Town, is of key significance, containing as it does not only Tallinn’s Central Business District, but more entertainment outlets, foreign embassies and a large number of residents.

Add to that the district of Kadriorg, to the east of the Kesklinn, with its leafy, evocative streets, fine old housing, and the Palace built for Catherine the Great, not to mention the President’s residence, and you already have a large, contiguous area of desirable housing with strong rental potential. In fact, the three areas noted above come under the one administrative area as far south as the Ülemiste Järv (see map 2) which is the Tallinn city lake, and cover 28 square kilometres in total.

But these areas have already arrived, so to speak. Whilst developments in the Kesklinn in particular look set to continue, such as the new Finance Ministry as reported in a previous post, and there is plenty of scope for refurbishment work in all areas, it seems unlikely that there is to be any radical transformation here. That process has already happened, stretching back the 20 years since Estonia’s independence.

Emerging Districts

Now to the districts of Tallinn showing promising signs for investors. Again, these are largely adjacent to one another and can thus be treated as a single entity for our purposes. Essentially they comprise the ‘Sadam’ harbour area (see map 1 below) stretching westward along the waterfront along the ‘Culture Kilometre’ (a popular cycling and jogging route) to Kalamaja. This stretch is set for a lot of exciting development in the coming years, both residential (that process has already started with the quality new housing in the Jahu and Suur-/Väike-Paterei streets) and commercial. One recent development which has already happened is the newly refurbished Seaplane Harbour, which includes dry docks, Seaplane Hangars dating back to the late Tsarist time which hold a museum, and vessels of historical interest.

Kalamaja itself is similarly already experiencing a renaissance. It largely comprises character wooden houses, mostly around a century old but here have been some tasteful new builds constructed along the same lines, as well as new, more modern builds. The Kalamaja effect is spreading southwards to neighbouring Pelgulinn, which has similar housing stock and is quiet and family friendly, yet still a stone’s throw from the Old Town, eventually dovetailing into the borders of the more-established Kristiine suburb. The Kassisaba district (close to the British embassy) has seen construction and refurbishment activity aplenty recently as well (e.g. at Adamsoni 33).

Returning to Kalamaja, the border that separates it from Pelgulinn, demarcated by the goods rail line to Kopli, host what is really the hub of this new revival – the so called bohemian quarter. This comprises three of the hippest restaurants in town, Kukeke, run by the same people who are behind the successful Komeet restaurant in the Solaris centre, F-Hoone (literally ‘building F’) which are both in former light industrial buildings, and the more established Boheem cafe close to the station.

Other good quality refreshment outlets abound, and we have to mention the nearby Asian Cafe  on Kopli 4c close to the central train station, which offers tasty Indian, Chinese and Thai-style food for those in a hurry and at good prices.

Moreover this area is set to be the new alternative theatreland, with a theatre accomodating a good couple of hundred seats slated for construction next year.

Lastly, this effect may well spread Northwards throughout the Kopli peninsular (see map 1) over the longer term. The Kopli peninsular, once the site of aristocratic hunting forests, today displays very mixed use, with various commercial docks including the Bekker port, the HQ of BLRT, a shipbuilding company, plenty of old wooden workers cottages, office space, parkland and the magnificent Estonian Maritime Academy building. Beyond this at the tip of the peninsular lies the Paljassaare nature reserve, which is excellent for birdwatching and its natural environment in general, all year round.

Rough per square metre price of districts

As regards prices, a rough breakdown for average buying prices of the districts mentioned is as follows:

Old Town: 2 000 – 3 000 Euros/Square metre.

Kesklinn (excluding Old Town), Kadriorg: 1 800 Euros/Square metre.

Kristiine: 1 300 Euros/Square metre.

Kalamaja, Pelgulinn: 1 100 Euros/Square metre.

Kopli: 800 Euros/Square metre.

Naturally these are just ballpark figures at the time of writing and prices will vary with street, type of building, state of refurbishment etc.

As a rule of thumb, rentals will be at least 10 Euros/Square metre in the Old Town (and somewhat more than that for well-appointed properties) falling to around 6 or 7 Euros/Square metre further from the centre.

We hope that this gives a good overview of the state of play with the districts in central Tallinn to watch out for; naturally we welcome your questions, comments and feedback!

 

Maps (click to enlarge).

 

Map 1: Area to Northwest of Central  Tallinn,

including Kalamaja and Kopli peninsular.

 

 

Map 2: Old Town (Vanalinn), City Centre,

Pelgulinn and Kristiine (Lillekülla).

 

 

 

 

 

 

 

 

Map 3: Tallinn City.

 

 

 

 

 

 

Goodson & Red Tallinn Property Consultancy is a premier real estate service in Estonia, specialising in residential and commercial Tallinn real estate, with a strong focus on consultancy services for overseas property investors in Estonia. Our recent media accolades include mentions in both the UK quality newspaper the Daily Telegraph, and the New York Times.

 

 

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Apartments For Rent In Tallinn Increase Y-o-Y Slightly In Number, Greater By Rent Price

There has been a y-o-y increase in rental prices in Tallinn of 18 per cent, to July 2012, according to Tõnu Toompark on his adaur blog.

This undoubtedly is connected with the short supply of rental properties in Tallinn at the moment.

According to Tõnu and citing data from real estate portal kv.ee, the volume of rental apartments on the market has increased y-o-y, but not by much, which may put a downward pressure on residential rental prices through the summer and autumn – as noted there has been a rise up to now.

Tõnu cites more data from kv.ee which states that there were 1 996 apartments up for rent on the portal in June, which is only a two per cent increase y-o-y.

However, the shortage in availablility of rental items is not as perceptible today as was the case a year ago, Tõnu continues.

This will be predominant in those areas of Tallinn where more apartments have come on to the rental market, which has happened in all districts. writes Tõnu, except North Tallinn (which includes Kalamaja and Kopli) the Soviet-era residential district of Mustamäe and the leafy, sought-after outer suburb of Nõmme. These three areas have seen a fall in the volume of rental apartments available (by as much as -37 per cent in the case of Nõmme).

Fallinn demand may be the result of rising rental asking prices (as well as the latter being the result of falling supply). The average rental asking price in Tallinn was a 6.10 Euros per square metre in July 2011; a year later that figure had risen to 7.20 Euros per square metre.

In any event this makes the rental market attractive for investors; a shortage of supply and rising rental levels mean a property could be let out very quickly and at higher prices, ensuring good cashflow.

The district of Tallinn with the highest rise in number of rental apartments available y-o-y to July 2012 was the residential suburb of Kristiine, according to Tõnu’s data, at 23 per cent. The city centre (which includes the Old Town) saw a 10 per cent rise in number of available apartments over the same period, from 736 to 806 items (also by far the highest total number of items of any region, as might be expected).

Outside of Tallinn, Pärnu saw an 18 per cent rise in apartments available for rent, whereas Tartu saw the opposite trend with a -26 per cent fall over the same period.

The figure for the whole of Estonia was a -4 per cent fall.

The original article (in Estonian) and data is here.

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Redevelopment Of Train Station Area In Tallinn, Estonia Up For Tender

As recently reported on this blog, one of the up and coming areas of Tallinn is the area surrounding the train station, merging into the Kalamaja and Pelgulinn neighbourhoods.

Our faith in this seems to be bearing fruit; according to a recent report by Ott Tammik on the Estonian Public Broadcasting (ERR) English language site, the City of Tallinn is drafting the very terms and conditions for the tender of architectural plans that will make this long yearned-for development become a reality.

The project has been in the offing for some 11 years, and will replace the existing Balti Jaama Turg (Train Station Market). Not surprisingly the developments are not unopposed – one point of contention is the reassigning of Reisijate Street, currently closed to traffic and taken up by much of the marketplace itself, as a traffic street, and the existing Kopli Steet to become a four lane thoroughfare, the report stated.

Currently traffic is undoubtedly congested, particularly at rush hour, since Kopli Street is a one way street along the stretch that passes the train station. New developments would require better road access.

Other dissenting or at least questioning voices, as well as market traders, include national rail carrier Eesti Raudtee who wish to preserve some rail sidings and have space for additional platforms in future, according to the report.

Previous architectural plans had met with objections due to apartment developments blocking the view of Toompea, the seat of the Estonian government and the highest point of the old town.

As noted on this blog the area where Telliskivi Street crosses train tracks adjacent to the station is already something of a bohemian quarter, with two or three successful restaurants and various other businesses.

The original report is available here.

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Statistics: 96 Per Cent Of Residential Dwelling Space In Estonia Is In Private Sector

According to Tõnu Toompark on his adaur blog, 96 per cent of residential dwelling space in Estonia is in private hands.

The total number of residential items comes to 657 800 units, only a small increase on the last 12 years, with only three per cent of dwellings owned by local governments and one per cent by the state, writes Tõnu.

Given the upheaval of the collapse of the USSR 20 years ago and the wholesale transferral of ownership from state to private sector this is perhaps unsurprising, and is no doubt a factor in the somewhat active real estate market here, compared with some neighbouring countries (e.g. the Scandinavian nations) where public sector housing will account for a much higher proportion.

The original article (in Estonian) is available here.

 

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Dos And Don’ts When Letting Out Rental Property In Tallinn And Estonia: Part Two-The Don’ts

Following on from our article yesterday in which we outlined what you should do when letting out property in Estonia, here as promised is part two, in which we detail the ‘don’ts’…

1) Don’t wait to secure the highest rental rate possible. Profits can be washed out by the additional vacancy time; in addition, market conditions can change rapidly. By the same token, don’t keep rental rates high and accept a high vacancy rate while waiting for market conditions to improve. High levels of vacancy can lead to high tenant improvement costs and free rent as additional concessions due to the market being a tenant’s market. At the time of writing, the rental market is quite buoyant and so obtaining the market rate for your property without a long wait should be viable.

2) Don’t rule out proposedtenant improvements-losing a potential tenant by refusing to make improvements could lead to additional vacancy time.

3) Don’t make the mistake of cutting out promotional work on your apartment as well as search feesas the market tightens again. If you are not competitive in these areas, you risk fewer tours, which will mean less qualified tenants, which could lead to longer vacancy times.

4) Don’t halt refurbishment and improvement plans in a hot market. These plans can take months to develop and come to fruition. Tenants want the level of service and quality of appearance to be maintained over the life span of their lease. This may attract them to stay for another lease term, saving you money. That being said, you should keep your tenant improvement costs as low as possible. It’s a good idea to stay on top of the repair and maintenance needs of your property by repairing or replacing any item that is not functioning as soon after being notified as possible to prevent further damages or tenant dissatisfaction.

5) Don’t impinge on your tenant’s privacy: inform them about any potential visit well in advance and certainly at least 24 hours.

6) Do not leave anything of great financial or sentimental value in a property which you are letting out.

And that’s it! We hope you have found this advice helpful, and we’re waiting to hear your comments, questions or experiences!

Goodson & Red Tallinn Property Consultancy is a premier real estate service in Estonia, specialising in residential and commercial Tallinn real estate, with a strong focus on consultancy services for overseas property investors in Estonia. Our recent media accolades include mentions in both the UK quality newspaper the Daily Telegraph, and the New York Times.

 

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Dos And Don’ts When Letting Out Rental Property In Tallinn And Estonia: Part One – The Dos

Following hot on the heels of our recent posts on where to buy in Tallinn, Estonian real estate terminology getting lost in translation, and top tips when buying in Estonia, all of which we hope you’ve found helpful, we thought we’d continue on that trajectory.

This time, the topic is letting out properties. So here are the main ‘dos’ when letting out an apartment here or, for the most part, anywhere:

Many people become a ‘landlord’ in Estonia or elsewhere for that matter with little knowledge of the realities of what the process involves.

Even if you are an existing landlord already, you can never have too much advice, and there may be some differences between Estonia and wherever you hold your other properties.

A lack of knowledge about being a landlord can lead to such unwanted scenarios as unexpected expenses, void periods or problem tenants.

To help you avoid any of these undesirable situations, here are some of the most significant do’s and don’ts when letting out property in Estonia.

Do…

1) Make your property as appealing as possible to potential tenants (neat and clean, in order, decorated). If the property was formerly your personal home or part time home, or contains fixtures and fittings left over from a former occupant, be prepared to make the necessary internal alterations in order to successfully attract a tenant. One’s own personal tastes may not match with those of other people. Experience has shown that tenants on the whole prefer light, neutral colours and modern, contemporary (but not too extreme) fixtures and fittings. Time to get rid of that lime-green ceiling or novelty lampshade! ‘Minimal is king’, is a useful watchword here. At the same time, thoughtfully-located and attractive pictures which are in keeping with the overall design of the apartment can make all the difference, as can a few well-placed mirrors. Plants also make a huge difference, although naturally there is the issue of getting tenants to water them once an agreement has begun. The property should also be wisely furnished (e.g. take away unnecessary furniture pieces, have modern and clean furniture which is in keeping with the property etc.)

2) Steer clear of void periods at all costs, even if this means being flexible about rental levels. This also means you should be flexible in terms of rental periods, for example having a short term let for part of the year and longer terms during the remainder, to maximise profits and minimize void periods. This can have the effect of earning 10-15 per cent more per year. Naturally having a fully-managed service will mean that the hassle of organising this is out of your hands.

3) Consider letting the property out as a part-furnished property. Whilst many tenants may be travelling light or interested in short term lets and therefore more likely to choose a fully-furnished property, some scope for their own additions to the furniture can be attractive. What constitutes essential furniture in a part-furnished property? Naturally beds should be provided in the primary bedrooms at the very least; mattresses should be included only if they are relatively new (ie no more than 4-5 years old) and clean. Sofas and chairs should also be included where necessary, and substantial storage space in particular for clothes (wardrobes, walk in wardrobes, chests of drawers etc) is also a must. Kitchen fixtures and fittings should natrually be included and utensils, cutlery, crockery etc can also be provided inexpensively.

4) Provide as much detailed description of your property as possible. There are two very good real estate portals (kv.ee and city24.ee) which list properties available under quite detailed search parameters, in English and with plenty of photos. Your real estate broker will also be able to advise and guide you through the process of marketing your property.

5) Once you have a tenant, make sure that you have a proper lease agreement in place (certainly ask for a tenant’s documentation; get all the important terms of the tenancy in writing). You should also check the potential tenant’s background if possible (credit info, personal info, family, pets, smoking etc). An agent can advise you on this. It is worth having a detailed inventory compiled. This will be signed by both landlord and tenant, thus avoiding any unpleasant disputes arising surrounding any damage at the end of a tenancy. It should cover not only major items such as any furniture, but also details of the overall qualities of the walls, painted areas, flooring etc to account for any damage that might occur. You might also consider obtaining property insurance to cover for damage, and a security deposit, usually of one month, is also worth getting. It’s worth having an inventory taken (even in unfurnished properties).

6) Consider getting a property professionally cleaned at the end of a tenancy period. This can work wonders in attracting a new tenant, breathing new life into worn carpets and making grubby tiles sparkling again. First impressions last and it would be a shame to put off a potential tenant simply because of an unpleasant odour or dirty bathroom.

7) A certain amount of reasonable wear and tear should of course be expected, so expect it! Over time items will need to be replaced. As a general rule, fridges and other white goods will need to be replaced as they become outdated or cease to work over the years, and a property will need small redecoration works and maintenance works approximately every four years. Wooden parquet flooring also requires attention from time to time.

8) If you are living outside Estonia, it is well worth arranging for a managing agent who will not only find and reference tenants for you, but also draw up contracts, manage the collection of rents, bill payments, see to any maintenance or emergency repairs which may arise, advise you on any refurbishments that may need doing etc. Keep in touch: your managing agents can advise you about developments at the property, maintenance issues etc, but always respond to emails and queries on this promptly. This will lead to a better relationship with a tenant and an increased likelihood that they will want to stay on.

….and the ‘don’ts’ will follow in a later installment!

Goodson & Red Tallinn Property Consultancy is a premier real estate service in Estonia, specialising in residential and commercial Tallinn real estate, with a strong focus on consultancy services for overseas property investors in Estonia. Our recent media accolades include mentions in both the UK quality newspaper the Daily Telegraph, and the New York Times.

 

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Increase In Number Of Houses On The Property Market In Estonia

According to Tõnu Toompark on his adaur blog, although the kv.ee index* of property prices in Estonia has seen only scant changes over the past year (a 0.98 per cent y-o-y fall to June 2012) this does not tell the whole story as regards the market here.

For one thing, the index has been fairly stable over the past couple of years (the index is based on asking prices rather than transaction prices**) which means that vendors have not had unrealistic expectations. On the other hand, transaction prices (which are naturally lower than asking prices) have at least in some areas been creeping up towards the levels of asking prices, which has led to a quite active property market over the last few quarters, writes Tõnu.

One area where the statistics bear this out is in the number of houses which have appeared on the market recently – 409 in the year to June 2012. Now, 409 may not sound like a lot of items, but it is worth taking a look at the number of houses on the market at any one time. At the time of writing (13.00 on 25th July) there were, on the kv.ee portal itself, 14 516 apartments for sale in the whole of Estonia (5 646 in Tallinn) as against 8 000 houses (621 in Tallinn). In other words the property market in Estonia, and in Tallinn in particular, is dominated by apartments. The city24.ee portal paints a similar picture, with 14 115 apartments for sale across Estonia versus 6 101 houses.

It needs to be pointed out here that the two portals’ statistics are likely to represent a figure for items on the market which is higher than the actual figure (due in part to the same property being listed by multiple agents and so counted more than once, or ‘dead’ properties which have been listed for several years); nonetheless Tõnu cites 5 654 houses being on the market in Estonia in June 2012.

This increase in supply of houses on the market has not been uniform throughout the country, although in all but two counties (Maakond) in Estonia, there have been increases, some of them substantial. For example in the county of Läänemaa there was a 58 per cent increase in numbers of houses on the market, according to Tõnu’s data.

The two exceptions were Viljandimaa which saw a -24 per cent fall in supply, and Lääne-Virumaa which saw a -6 per cent fall (there are 15 counties in Estonia).

In addition to that, no data was available for changes in supply of houses in Põlvamaa (though only 15 houses were listed as for sale in June 2012 here).

The figure for Estonia as a whole was an increase of 8 per cent in the supply of houses on the market (409 items as noted).

As regards prices of houses, changes were more variable. As might be expected from microeconomic theory, an increase in supply led to a fall in asking prices in a lot of counties (as much as -27 per cent in Järvamaa in central Estonia). However five counties actually saw an increase in asking prices, including the key counties of   Tartumaa, Harjumaa (where Tallinn is located) and Pärnumaa (increases of six, two and one per cent respectively). Reasons for this are largely speculative, although it is worth noting that when taken as a whole, Estonia saw no change in asking prices.

In summary: both asking prices and transaction prices remaining pretty static in the market for houses in Estonia, but there is an increasing availability of houses to buy nonetheless.

The original article by Tõnu Toompark (in Estonian) is here.

*The KV.ee index, which commenced on 18th February, 2008 (i.e. this is the date on which the value of the index is calibrated at 100) measures the week on week change in residential real estate prices in Estonia. The data has been measured back anachronistically to 1 January, 2005, when the index stood at an “all time” low of 49.9. The “all time” high came on 7th May, 2007, when it stood at 108. Following the economic downturn of 2008 onwards, the index reached a low point (to date) of 61.4 on two occasions, on 5th September and 27th October, 2010.

**Please see our recent article on the translation of the Estonian words ‘pakkumine’ and ‘pakkumushind’.

 

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Tallinn Property and Goodson and Red Present The Idyllic “Katmandu” Villa

Tallinn Property and Goodson & Red are delighted to present this truly stunning, exclusive and exquisite secluded rural Villa development, just a stone’s throw away from the beach and the peace and quiet of the Baltic Sea and yet only a short drive from the city of Tallinn.

Named ‘Katmandu’ and set in approximately three quarters of a hectare of land, the hunting lodge-style Villa is located near the small town of Keila-Joa, some 25 km from Tallinn.  The development was designed by noted Finnish architect Ilkka Salo and completed in 2000, with some subsequent minor renovation. The main building boasts four spacious bedrooms, hallway, living room, dining room, study, utility room, and both a standard and a catering kitchen.

The complex furthermore has a separate, detached garage which can hold no fewer then eight cars, and a separate summer house.

The garage has a guest annex above it with three rooms (including a bathroom). The summer house comprises kitchen with grill/barbecue facilities, sauna and changing room, bathroom, fireplace and fitted wardrobes.

There is also a stable with space for two horses, and the plot includes a paddock.

Interior features of this marvellous development includes kitchen furniture from Puustelli, kitchen appliances from Siemens and a music system by Bose. Bathrooms are equipped with luxury Villeroy and Boche fixtures. WiFi (Elion network) an alarm system and Satellite TV.

Heating options include underfloor heating, oil based or electrical possibilities. The upper floors make use of radiators.

The total land area comprises an area approaching 0.75 hectares (1.8 acres), whilst the buildings total an area of 755 square metres. A large courtyard is enclosed on three sides, whilst the garden is impressively landscaped, including attractive bridges and driveways, and set in a secluded, forested area. The territory is secured by an extensive security fence and controlled gates, along with security cameras.

The property is close to the small town of Keila Joa with its manor, and the Lohusalu Marina is also close by.

The development is constructed with Lecatern blocks, with a quality stone roof.

The Katmandu Villa would naturally be an idyllic location for a family, especially one which enjoyed equestrian and water-borne pursuits.

Naturally words can only do so much to describe this wonderful property, so be sure to check our site here for more details and plenty of photographs.

Goodson & Red Tallinn Property Consultancy is dedicated to delivering premier residential and commercial property services in Tallinn and Estonia. Through more than 8 years of consistency in one of the most active property markets in Eastern Europe we have developed an enviable reputation for our in-depth market knowledge and expert, considerate personal service. Our services include comprehensive property brokerage services for sellers, home search, long and short term lettings services and a comprehensive professional management service for landlords.

Goodson & Red Tallinn Property Consultancy is a premier real estate service in Estonia, specialising in residential and commercial Tallinn real estate, with a strong focus on consultancy services for overseas property investors in Estonia. Our recent media accolades include mentions in both the UK quality newspaper the Daily Telegraph, and the New York Times.

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When Is An Offer Not An Offer? – Understanding Estonian Real Estate Jargon

Here at Tallinn Property we make it our mission to ensure you understand the Estonian property market fully, regardless of whether you speak any Estonian or not!

It has been brought to our attention that there may be some confusion about what is meant by ‘offers‘ in the real estate context here.

The word ‘offer’ in Estonian is pakkumine, or plural pakkumised (though this can change – Estonian is a notoriously complex language with 14 case endings, but no words for articles (a/the) or prepositions (in,on, at etc.) meaning that nouns will change their endings depending on where they are in the sentence – a function provided by articles and prepositions in English).

In any event, translated as ‘offer’, what pakkumine actually means is quite different from the English meaning in the context of real estate, at least in the UK.

Whereas in Britain, making an ‘offer’ is that process by which a buyer or potential buyer will suggest a price for a house or flat which is usually somewhat lower than the asking price as listed by the estate agent. The vendor can accept or reject this offer, but the most common practice would be to make a counter-offer, and this negotiation would go on until either a price acceptable to both parties was met or an impasse was met.

Thus the offer price of property in the UK and indeed, in this sense, Estonia and everywhere else, will generally be lower than the asking price.

However in Estonia, ‘offer’ actually means an item on the market. In other words offers are the supply of items, most usually apartments. Thus ‘offer price’ (pakkumishind) actually means ‘asking price’. This explains why ‘offer prices’ in Estonia are invariably higher than transaction prices (tehinguhinnad) since vendors here are no more or less generous, and buyers no more or less parsimonious, than anywhere else!

In other words pakkumishind really means ‘asking price’ i.e. what the vendor hopes to receive. And ‘offers’ in general means the supply of flats and house on the market, not the volume of people offering to buy an item.

We hope that clears everything up for all our readers, and rest assured that we will blog about any other things which might get lost in translation – or if you have your own query, just ask us!

Goodson & Red Tallinn Property Consultancy is a premier real estate service in Estonia, specialising in residential and commercial Tallinn real estate, with a strong focus on consultancy services for overseas property investors in Estonia. Our recent media accolades include mentions in both the UK quality newspaper the Daily Telegraph, and the New York Times.

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