Uus Maa: Market review november 2017

Uus MaaClassics would describe the November market review as ‘All Quiet on the Western Front’. November did not have any surprises in store for the market, the aftermarket activity was good, and real right contracts for new developments were mostly concluded earlier. The median price was one of the highest of the year, although it was lower than November results. The number of transactions also decreased slightly, but compared to previous years, there were considerably higher figures. In total, 1,920 purchase/sale transactions were made in November, with a median price of 1,255 EUR/m2. Compared to October, the number of transactions decreased by 84 or 4.2%, while the median price decreased by 2.2%.

In the first 11 months of 2017, both the number of transactions and the median price increased compared to 2016. During the 11 months, 20,414 transactions were concluded in Estonia, and the number of transactions increased by 1,523 or 8.1%, as compared to the same period of the previous year. At the same time, the median price of transactions increased by 6.6% (1,144 → 1,220 EUR/m2).

171218 Dynamics of the Estonian apartment marketData: Land Board

The relative importance of counties also remained largely unchained, when taking into account the new local-level administrative territories that changed with the administrative reform. In 2004, the largest number of deals was concluded in Harju County – 1,036 transactions, or 51.7% of the total number of transactions. The largest share of transactions in Harju County was made up of transactions in Tallinn, totalling 82.6% in November. Compared to October, the number of transactions in Harju County decreased by 107, which was caused by a decrease in the number of transactions outside Tallinn. The median price was also highest in Harju County – in November, the median price dropped by 1% compared to October, remaining at 1,622 EUR/m2.

In terms of the number of transactions, counties with more residents followed Harju County as per usual: 206 transactions in Tartu County, 193 transactions in Ida-Viru County, and 115 transactions in Pärnu County. Compared to October, the number of transactions increased in five counties; in terms of absolute value, the highest growth was achieved in Ida-Viru County (+29) and Tartu County (+23). After Harju County, the number of transactions most decreased in Pärnu County (-23), where it stabilised after a record high in October.

In terms of median price, Harju County was once again followed by Tartu County (1,250 EUR/m2) and Pärnu County (920 EUR/m2). In November, the median price grew in seven counties; in absolute value, the largest increase was in Saaremaa (+534 EUR/m2), where there were 23 transactions less than last month. In Viljandi County, a weak October was followed by a regular November, so the median price increased by 124 EUR/m2. The median price dropped the most in Pärnu County (-149 EUR/m2), falling to the normal level after the two record months.

171218 Dynamics of the Estonian apartment market in countiesData: Land Board

As mentioned above, the number of transactions in Harju County decreased compared to October, although Tallinn had, perhaps, the smallest ‘role’ to play in this – compared to last month, only ten less transactions were made in Tallinn, and the median price decreased by 1.1% at the same time. Compared to the 11 months of last year, 553 more transactions have been made this year (+ 6.7%), while the median price has increased by 8.2% (1,527 → 1,652 EUR/m2). It was also all quiet in Tallinn in November – the small changes in the number of transactions and prices were predominantly due to changes in the number of real right contracts for new developments. In total, 856 transactions were concluded in November, with a median price of 1,688 EUR/m2.

171218 Dynamics of the Estonian apartment market in the districts of TallinnData: Land Board

In terms of official data, the changed interest in the segment of new developments can best be explained with the statistics of alienators of real estate transactions, even though it includes immovable properties in addition to apartment ownerships. Compared to October, the number of real estate objects transferred by legal entities decreased in November – in total, legal entities concluded 656 sales transactions, which means that even though their share in the total number of transactions decreased, it was still higher than the number of objects transferred by private individuals. In total, legal entities sold 656 real estate objects in October, totalling 49.2%. Private individuals sold 634 objects (47.6%), the rest of the parties 36 objects, and the state and local authorities sold 7 objects.

171218 Transactions by the type of transferorsData: Land Board

The change in the number of real estate contracts influenced the statistics regarding the districts of Tallinn even more than the city’s general statistics, as the number of transactions is even smaller there. In November 2017, most deals were concluded in Lasnamäe district (226), followed by other more crowded districts such as the city centre (177), northern Tallinn (131), and Mustamäe (120). Compared to October, the number of transactions increased in three districts; the most in Lasnamäe (+44). The number of transactions decreased most in Haabersti (-35) and northern Tallinn (-22). In Lasnamäe, the increase in the number of transactions was mostly thanks to new developments. In Haabersti, however, they caused a decrease in the number of transactions. Sales of new developments also decreased in northern Tallinn, but the number of aftermarket sales decreased even more.

171218 Number of transactions by districts of the cityData: Land Board

The median price was, as in previous periods, the highest in the city centre (2,164 EUR/m2), where the median price decreased by 2.3% compared to October. The city centre was followed by Kristiine (1,843 EUR/m2) and northern Tallinn (1,795 EUR/m2). The median price increased most in northern Tallinn (+ 7.4%), mainly due to changes in the structure of transactions. The median price decreased in November in the following districts with a large number of transactions: 1.4% in the Mustamäe, 2.3% in the city centre, and 3.9% in Lasnamäe.

171218 Dynamics of the Estonian apartment market in the districts of Tallinn 2Data: Land Board

Though Tähtvere rural municipality was added to the city of Tartu with the administrative reform, we only reflect on the purchase and sale transactions concluded in former city of Tartu, as considering the new borders distorts the real estate statistics and changes the comparison principles. Compared to October, when the number of transactions was rather low, the number of transactions increased by 16 in November. However, the median price remained practically the same, which is, for Tartu, rather high compared to other similar settlements in the same period. In the first 11 months of the year, the number of transactions decreased in Tartu in comparison with the previous year, although the number of transactions will increase in the near future, given the growing volume of construction. In total, 143 purchase/sale transactions were made in November, with a median price of 1,267 EUR/m2.

171218 Dynamics of the apartment market in TartuData: Land Board

While Tartu is taking a so-called break in terms of the number of transactions, Narva has finally managed to increase the number of its transactions. However, the median price is still decreasing. Thanks to transaction activity, the median price should also increase next year, also thanks to a low comparison basis. In November, 61 transactions were concluded in Narva, which was 7 transactions more than in October, and the median price in November was 404 EUR/m2 – compared to October, it increased by 13.5%. During the first 11 months of the year, the number of transactions increased by 103 compared to the same period last year, while the median price dropped by 3.9% (412 → 396 EUR/m2) compared to the previous year.

171218 Dynamics of the apartment market in NarvaData: Land Board

As with Tartu, the overview of Pärnu only takes into account those transactions which were concluded in the city borders, even though the city has become one of the world’s largest cities in terms of area with the administrative reform. Compared to the record month of October, November was rather dull for the real estate market of Pärnu. The number of transactions fell to the standard level, decreasing by 30 compared to October. The median price was one of the highest of the period, almost as high as in Tartu, even though there was a slight decrease (-2.7%) compared to October. In total, 79 transactions were concluded in November, with a median price of 1,121 EUR/m2.

171218 Dynamics of the apartment market in PärnuData: Land Board

From October 2017, the statistics of other municipalities reflect the impact of the administrative reform, which ultimately means that it reflects municipalities which were not reflected there before. Thus, Tapa and Paide municipalities also made the top ten of other municipalities’ transactions. On the usual line, most transactions were concluded in Kohtla-Järve and traditionally, the second largest new development market was outside Tallinn – Rae municipality. The number of other municipalities’ transactions was quite similar – the forth and ninth-tenth place were only separated by 11 transactions, which means that differences in the number of inhabitants are not the main factor in the real estate activity of larger municipalities. Customarily, the median price was the highest in the neighbouring municipalities of Tallinn. The table also reflects on municipalities where the median price of transactions was extremely low (Kohtla-Järve city, Valga municipality, Tapa municipality). The other municipalities tended to stay between two extremes – the prices in Viljandi, Haapsalu, and Rakvere have historically been quite similar and are more characteristic of the rest of Estonia’s real estate market, while Jõhvi and Paide are starting to show lower prices.

171218 Remaining municipalities, november 2017Data: Land Board

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