One of the clearest shifts in Estonia’s residential real estate market is the decline in the number of buyers for higher-priced homes. According to Janar Muttik, Member of the Management Board of Everaus Kinnisvara, many families now set their maximum home-buying budget at around €250,000.
“We can clearly see that homes priced above €500,000 are more difficult to sell than they were before. There are fewer buyers in this segment, and purchase decisions are taking longer. A few years ago, there were more customers who had the funds readily available and moved forward with their purchases much faster. Today, the market has changed,” said Muttik during a real estate panel discussion at the Investment Festival, where he appeared alongside Kristjan Tamla, CEO of EfTEN Capital.
According to Muttik, the shift is largely driven by buyers becoming more cautious about their borrowing capacity. Higher interest rates, the rising cost of living, and the general economic uncertainty of recent years have led families to calculate much more carefully what kind of home they can realistically afford.
“Just because a bank is willing to lend a certain amount no longer means that families want to borrow the maximum. Today, people focus much more on ensuring that their monthly mortgage payments still allow them to maintain a good quality of life. Buying a home should not mean putting a family’s entire financial freedom at risk,” Muttik explained.
Everaus Kinnisvara’s recent experience shows that the mid-market segment is currently performing the strongest. In Harju County, demand for terraced houses and family homes is particularly healthy in the €300,000–€400,000 price range.
“This is where buyers are looking for larger homes, private outdoor space, practical layouts, and a family-friendly environment. Rather than luxury, they are seeking a sensible balance between price, quality, and everyday usability,” Muttik said. He added that an increasing number of families now have a realistic upper budget of around €250,000.
“This is an important signal for developers, as a significant share of demand is shifting toward a price range where every square metre and every additional feature must be clearly justified.”
According to Muttik, today’s homebuyers are becoming increasingly practical. They are no longer willing to pay for extra square metres they will not use or for premium features that increase the purchase price without meaningfully improving their daily lives.
“As a result, the development market is moving towards more precisely targeted products. The premium segment will remain, but broader and more stable demand lies in homes that fit the real budgets of average families.”
Finding an affordable newly built family home in Tallinn has become increasingly difficult, as land prices, construction costs, parking requirements, and lengthy planning procedures continue to push prices higher. Consequently, many families are turning their attention to the municipalities surrounding Tallinn, where the same budget can secure a larger and more practical home.
“In Tallinn’s most sought-after neighbourhoods, buying a new family apartment often requires significant compromises in terms of size, location, or monthly mortgage payments. In Harju County, the same budget can offer much more. If transport connections to Tallinn are good and schools and everyday services are nearby, it becomes a very logical choice for families,” said Muttik. He added that the next phase of the market will favour developers who are able to design homes tailored to the specific needs of their target customers.
“Beautiful visuals alone are no longer enough. A well-designed home means the right size, the right price, the right location, and the right functionality. Buyers are making more informed decisions and are willing to pay for what genuinely improves their quality of life,” Muttik concluded.
The Investment Festival, held this year for the twelfth time, is organised by Äripäev and features more than 80 leading experts from Estonia and abroad. Everaus Kinnisvara was among the festival’s partners.
