Real estate experts say that a new construction boom is about to start in Tallinn and will soon create an oversupply in apartments. In Tallinn alone, about 14,000 new apartments are either already being built or have been approved in detailed plans, writes Äripäev.
“The platform prepared for the new growth of the real estate market is so immense that new apartments will soon flood Estonia and its capital,” says Peep Sooman from Pindi Kinnisvara.
Tõnu Toompark who monitors real estate prices agrees. “There is a definite risk of oversupply in residential premises in Tallinn. Signals about economic recovery have made developers move fast and rush new development projects to the market.”
To make matters worse, the number of unsold new apartments has been growing for some time. A survey of by real estate company Pindi Kinnisvara shows that of about 80 new apartments that came to the market in Tallinn every month in 2010, about 20% remained unsold.
According to Toompark, thanks to bank lending, there have been several new residential developments in Tallinn that have recently sold well including residential projects in Meeriku street, Paldiski road, Vuti street, Pärnu road, Helme street and Soo street.