Figures are hard to come by, but most agencies agree property prices have fallen this year by 5 to 10 per cent, with the steepest falls in the old town and the crumbling Soviet-era tower blocks in the suburbs.
“We tend to steer clear of Tallinn right now,” says Charlie Pritchard of UK-based Churchill Solutions. “That’s where the biggest boom was and the market is now turning.”
Other agencies are more sanguine. Baltic agency Ober-Haus agrees that the overall market may stagnate this year but, for the off-plan new developments that foreigners typically buy, it believes prices should still rise by 5 to 10 per cent.
Foreign demand has sagged slightly but British and Irish buy-to-let speculators are still coming and Scandinavian buyers from across the Baltic Sea remain keen on the city as a cheap holiday home location.
Most foreigners are interested in developments just outside the city centre, which start at €2,000 a square metre, although they represent only 10 per cent of buyers there. Suburban houses are more popular with local families but they are too large to offer good yields and too difficult to sell if there were to be a prolonged market downturn.
Meanwhile, the old town, where foreigners make up half the buyers, is now simply too expensive. “People are just not willing to pay those prices,” says Charles Rodger, of UK-based Arc Property.
British investors are typically reinvesting equity from their rapidly appreciating properties at home, but there are also some who have no property at all. >>>>
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