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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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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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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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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Ten Top Tips When Buying Residential Property In Tallinn And Estonia

In amongst all the up-to-date news and developments about the real estate market, and everything else in Tallinn and Estonia, we like to provide concrete advice to those who are thinking of buying in Tallinn. After all, property is our passion so we ought to give vent to that now and again!

To that end, here’s some advice on buying here, which we’ll provide free, ‘cos we’re like that. We might even cover the dos and don’ts of letting out property here soon as well so watch this space. Even if you have already invested here, you will find some useful tips to help you navigate the small but thriving real estate market here.

We have taken the perspective of a potential overseas investment buyer in Estonia (i.e. buy-to-let) but the following is largely also applicable to those who are thinking of buying a part-time (such as holiday home or pied à terre in Tallinn) or indeed full-time dwelling in Estonia.

Please note that this post is for information only and should not be taken as legal or financial advice. Please contact a legal or financial professional for that! (We can help get you in touch). This information is provided free of charge and, whilst we strive for accuracy in all things, Tallinn Property and Goodson & Red accepts no responsibility for any loss or other misfortune arising after acting upon this advice.

That said, we are confident that the information provides an accurate consumer-eye picture of the residential real estate climate in Tallinn and strongly advise you to bear it in mind, especially since there is unlikely to be any similar information avaiable in English, so read on..

1) Find a reliable partner who will protect the buyer’s (i.e. your!) interests. The best indicator is a good friend, acquaintance, a positive experience or a recommendation from someone in the know here. If you are not sure then visit at least a couple of estate agents/brokers to get a better idea of different work cultures and strengths.

Some of the agents here in Tallinn are large and well established, including Uusmaa and 1Partner, which have a large volume of items, a big staff, offer a range of services and have plenty of knowhow (Uusmaa was founded in 1993 not long after Estonia became independent, and is nationwide). 

Some other bigger agencies in Estonia to think about include Pindi-Eri, Arco Vara, DTZ (which is not so strong in Tallinn) and Domus.

Bigger is not necessarily better of course, and there are a plethora of smaller and middle-sized agents in Tallinn and Estonia in general (at least 300 across the country). The range and quality of services will vary, however, and it is important to understand that the estate agent sector is not so heavily regulated as it is in, say, the UK. Some agents, particularly the bigger ones, are heavily sales-driven; the very small outfits may simply be an individual registered as a company to market a couple of properties belonging to themselves or friends and relatives. In general not all agents are experts in dealing with overseas investors and focus more on the domestic market so it is important to establish their credentials here too.

2) Unless you speak Estonian it is naturally important to find an agency conversant in a language which you understand. Most of the bigger agents, indeed most professional-aged people, will speak English, and most agents will speak Russian too. It’s not hard to find Finnish speakers here either, and not unheard of for agencies who have staff conversant in German, Swedish, Spanish or Italian either.

Most of the bigger agencies will have websites in two to three of these languages (usually English is one of them, although not all of the material in Estonian is necessarily translated) and often each individual agent will list the languages he/she can speak.

3) Be sure of the current market situation. The market is relatively transparent compared with some other areas of the CEE zone; one useful source is the two big real estate portals here, www.kv.ee and www.city24.com. These hold most of the properties that are on the market in Estonia (city24 also covers Poland, Sweden, Finland, Lithuania and Latvia) are searchable (in English) by region of Estonia, district (in the case of Tallinn) number of rooms, size, price and many other variables. Listings usually come with multiple, good quality photos although you should of course visit a property in person before buying; the agent who is acting for the property will be listed. Of course some properties will be listed with multiple agents.

Please note that just because a property is listed on kv.ee or city24.ee it doesn’t mean that the asking price is necessarily going to be reasonable, and be sure to look at the date the advert commenced. If a property has been up for more than a few months it is likely there are some issues either with price or something else. At the time of writing the average price per square metre for property in Tallin was a little over 1 000 Euros/square metre, rising to around 1 800 Euros/Square metre in central Tallinn (usually somewhat more than that in the Old Town itself, with Toompea being generally the most prestigious part of the already-prestigious Old Town) and the sought-after residential district of Pirita.

The figure for the whole of Estonia was 700 Euros/Square metre at the time of writing although there are naturally regional variations, with Tartu and the resort town of Pärnu, for example, being more expensive than the towns in the eastern-most parts of the country.

A bewildering array of statistics is published every month by one of the big hitters, Pindi-Eri, although the catch is it’s all in Estonian. This includes figures for average prices, sizes, number of owners etc. for all areas of Estonia going back many years (transparency, remember!). Some more comprehensive information is available on real estate expert Tõnu Toompark’s adaur blog (again usually in Estonian) together with Goodson & Red’s quarterly Market Review (and this IS available in English!) plus of course this blog.

4) When you have found an agent, obtain from this real estate partner an accurate picture of the service they provide and the fees they charge buyers for their services. It is normal for buyer’s agents to charge something. This shouldn’t be much more than a two to three per cent commission, or a fixed fee plus commission, or purely a fixed fee, but it varies by agent and also type of property.

It would often work in the buyer’s advantage to go for a fixed fee, since with a commission, it is not in the agent’s interest to get a lower price since they would be losing out on commission in so doing. At the same time this fixed fee might be split between an initial sum and a ‘bonus’ sum payable on completion of sale. A ballpark figure fixed fee would be a around 1 000 to 2 000 Euros for the initial fee. The bonus will often be pegged to the value of the property and could be anything from around 500 Euros for a small property to 3 000 or so for a high end property. In any case the fixed fee should equate to a commission of around two to three per cent, without the disincentive noted above.

Beware of agents who promote a ‘discount’ on their fixed fee or commission if the selling price is reduced by a certain amount from the asking; this could encourage the buying agent to collude with the seller to set the initial asking price higher than it is worth to give the impression of obtaining a good price. Thankfully such practices in Tallinn are now the exception rather than the norm and not something which larger, reputable agents would be likely to fall into, but as an overseas national it is important to exercise due care and obtain the advice and assistance of a local acquaintance where possible, even simply for language issues. On the plus side, Estonians are quite flexible, if you see a property you like but the buyer’s fee structure doesn’t quite work for you, always speak up and ask how this can be negotiated.

5) Become acquainted with all factors relating to the buying process. These include notarized contract forms, state orders of magnitude, notary fees etc. In general this is quite a straightforward affair in comparison with the UK for example, and it is not necessary to hire a lawyer or obtain a full survey unless you wish to.          

Ask the partner to identify local laws related to real estate acquisition / possession / management. Depending on where you are from, there may be restrictions to buying property (if you are an EU citizen for example, there are not). Also be sure to check whether your country of origin has a double taxation agreement with Estonia; if it does not, you are not liable for taxation on rental income in your own country.

In general if you on the ground in Tallinn or Estonia it is possible to view a property in person in exactly the same way you would do in the UK or US, though you can usually (not always) expect a refreshing lack of hard-sell or ‘estate agent-ese’ in comparison. Making an offer can be done verbally although this does not make it legally binding; the seller might come back with a counter offer, although note that some sellers have little leeway in the negotiation process (due to many people borrowing during the boom time at a large loan to value rate at higher price levels than today). Naturally you should have an idea based on point 3) above plus your own reasearch as to whether you are getting a good deal even at the asking price, and there are some bargains around.*

6) Explore all options for finance. If you are able to borrow from Estonian banks (for instance an EU citizen should be able to) it is worth investigating because they are offering low rates even by present-day standards (as low as three per cent). The real estate portals kv.ee and city24.ee noted in point 3) above carry mortgage calculators which can give the monthly payments due on a property. Banks are much more stringent in their terms than the boom period of course, and 100 per cent loan to value mortgages are a thing of the past, though that is likely to be the case everywhere. In any case the mortgage application process in Estonia is quite straighforward and decisions are usually made quite quickly. If you are based in another country it may be possible to use your income there to determine how much you can borrow; with Estonian real wages still comparatively low by EU standards you may find you can borrow much more than a local Estonian could, however it is a good idea to exercise restraint and not overstretch yourself.    

7) When considering buying an investment property, do think about the type of property you are investing in. Is it likely to be suitable for a student, foreign national or young professional(s)? How old is the building? What are communal areas like? Are there likely to be any planning permission issues? Is there much storage? Is there a parking space? A garden? What are the communal charges? Is it located near to public transport links, retail outlets and other facilities? Again, your agent will be able to advise you on this.

8) Location, location, location. Something of a cliché but true nevertheless. Experience shows that the best chance of investing in a successful rental property falls within the central part of Tallinn. This incorporates the old town, the ‘Kesklinn’ (city centre) and to a certain extent the areas of Kadriorg and Kristiine, to the east and west of the centre respectively, so you should really confine your search to these areas of Tallinn. Also worth considering are areas which are “up and coming”, most notably the waterfront from the harbour westward to the Kalamaja district, fast becoming the bohemian quarter of Tallinn with restaurants, cafes as well as residential developments sprining up, and still within walking distance of the centre; your broker will be able to advise you on the current landscape.

We are not saying that properties outside this zone are necessarily going to be untenable, but the distant location together with type of property (which tends to veer between either Soviet era apartment blocks or older wooden houses which would tend to suit local families, to larger, detached houses with large gardens which would be difficult to let out and manage) make it unlikely. Outside of Tallinn the scope is somewhat more limited for investment property, but your agent will be able to advise you nevertheless.

9) When buying a newly-refurbished apartment, do not assume that the kitchen, and even the bathroom, will be fully installed. Often you will have to by the fittings separately and get them installed, so be clear as to what is and is not included in the price and the time-frame within which the property will be ready for habitation.

10) When employing the services of workmen be sure to get recommendations from your agent or other contacts that you may have in the country. Self-explanatory really, but please note that due to economic factors many of the country’s best construction workers, craftsmen, carpenters, plumbers etc. are out of the country at any given time, sometimes only on a temporary basis but often (particularly in Finland) semi-permanently at least. For this reason it is crucial you get recommendations. On the other hand don’t let this put you off any property which you see as having potential but which needs work; part of Estonia’s economic recovery at the time of writing lies in a mini-construction boom, with rising prices in construction materials ensuring that there are people willing and able to work in this field.

 

*Please note that the above info does not include the case of foreclosed properties, which are generally in the possession of the banks and are often being auctioned off. Having said that much of the excess here has already been taken up and it is difficult to find bargains today, not to mention the fact that there might be issues regarding existing tenants or former owners still inhabiting the dwelling. For this reason we do not recommend inexperienced investors in this region intentionally pursuing this route.

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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Demand For Office Space Outstripping Supply In Tallinn, Estonia

Demand for good quality (A class plus) in Tallinn is currently outstripping supply, according to a report on the Estonian Press Digest from News2Biz.

Whilst the period from late 2010 well into 2011 saw an upsurge in construction, including office space, rising construction costs have since dampened down this phenomenon, the report stated.

Quoting sources at Uusmaa real estate firm, the report went on to explain that whilst many of the developments during the more frenetic period of construction were of good quality and in prime locations in the centre of Tallinn, since then the lack of modern, high class office space has become ‘acute’.

 

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“Why You Should Be Investing In Tallinn Real Estate – Your Essential Guide to the Tallinn Property Market”: Available Soon!

We haven’t forgotten about our promise to launch the new Guide “”Why You Should Be Investing In Tallinn Real Estate – Your Essential Guide to the Tallinn Property Market”: Available Soon!”.

Our team are putting the finishing touches to the publication and it will be out very soon so watch this space!.

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

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Statistics: Construction Volume Index In Estonia Grows 28 Per Cent Y-o-Y

Following yesterday’s post revealing the minimal increase in apartment prices in Estonia over the past 12 months, another post on Tõnu Toompark’s Adaur blog has stated that, in contrast, construction volume has seen a 28 per cent rise y-o-y to Q1 2012.

This figure is derived from the construction volume index compiled from the Estonian statistics office data, which currently stands at 84 points, writes Tõnu.

This represents a return to the average level for 2009, Tõnu says.

In the meantime there had been a growth in construction volume index over the last five quarters, at figures of around 30-40 per cent.

For the full report (in Estonian) see here, including graphs showing figures for the building index both in Estonia and globally, going back to 2001 (though this is retrospective; the index is calibrated at 100= the year 2005), together with graphs showing y-o-y changes over the same period (where the ‘year’= 100, so the figure for Q1 2012 will be 128).

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

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Apartment Prices Showing Slight Y-o-Y Rise in Tallinn, Estonia

Most of the major newspapers in Tallinn are taking a break today after Jaanipäev but here at Tallinn Property we don’t want to take a break from bringing you up to speed on all that is happening in real estate in Tallinn and Estonia in general!

According to a report on Tõnu Toompark’s adaur blog, signs of very slight price increases in property prices in Tallinn and Estonia as a whole can be gleaned from the latest kv.ee index. The kv.ee index currently stands at 61 points which is all of a 0.5 per cent y-o-y increase. Offer prices statistics for both Tallinn and some of the provincial towns show more concrete evidence of modest increases.

Meanwhile the volume of apartment offers remains at about the same level it was a year ago, though in Tallinn the level is about one per cent lower with 8 700 apartments currently under offer, writes Tõnu.  Average offer prices for the whole of Tallinn (apartments) currently stands at 1 317 Euros/square metre.

That said, agents have shown some optimisim in reporting a slight rise in offer prices on Tallinn flats, Tõnu continues. At the same time it needs to be pointed out that offer price rises remain below the growth in actual deal prices. Whereas the offer price on Tallinn apartments has seen a five per cent rise y-o-y, actual deal prices have seen a seven per cent rise over the same period, Tõnu says.

According to the data, within Tallinn, the district to have seen the highest rise in offer prices is Kristiine with an eight per cent increase from 9 May, 2011 to 9 May, 2012 (average price of 1 316 Euros/square metre). The Old Town actually saw a decrease of one per cent in offer prices over the same period (average price of 2 792 Euros/square metre). The greatest increase in volume of offers over the same period was in North Tallinn with an increase of 13 per cent (to 1 418 offers) though many areas saw a fall y-o-y, as high as -18 per cent in Pirita (278 offers). Outside of Tallinn, Tartu has also seen a fall in the volume of offers (-22 per cent) whilst simultaneously experiencing an increase in offer prices of eight per cent (average of 1 051 Euros/square metre).

Estonia as a whole has seen only small increases in both number of apartment offers at two per cent (18 511 currently) and an increase in average offer prices of three per cent (1 004 Euros/square metre).

The full article and statistics (in Estonian) can be viewed here.

The kv.ee index, which commenced on 18 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 7 May, 2007, when it stood at 108.

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

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