The ending year has presented challenges to everyone in the real estate sector, and high interest rates combined with low consumer confidence have led many homebuyers to postpone their purchase decisions. Yet energy-efficient and high-quality property developments also swim against the tide in challenging market conditions, still attracting the attention of home purchasers. As of today, Everaus Kinnisvara has sold out all four Keila Home apartment buildings, more than half of the developments to be completed in the next summer in Järveküla and Luige have been pre-sold, and 90% of the Everaus commercial building to be completed next summer is covered with lease contracts. To top it all off, the developer’s apartment buildings in Lagedi and Keila were awarded the title Keila Beautiful Home, making Everaus Kinnisvara the only developer in Estonia whose completed developments have received high recognition in various home competitions.
We spoke to Janar Muttik, CEO of Everaus Kinnisvara, about what catches the attention of people looking for homes and how to create property developments that are valued by clients even in difficult times.
Janar Muttik, founder and CEO of Everaus Kinnisvara: Photo: Maria Roosaare
Looking back at the property market in 2023, how would you describe it?
The market experienced a significant decline this year and is expected to remain in a downturn in the first half of 2024. While the economy has shown initial signs of stabilisation, we can only expect quiet growth in the second half of 2024.
The commercial real estate sector was most affected by high interest rates, with interest expenses surpassing rental yields this year. In the residential real estate sector, homebuyers have adapted to the interest rates. Euribor has started to decline, but buyers should still anticipate interest rates higher than the usual in the future. Free money is no longer available and obtaining a loan is more expensive than before.
How has the situation on the property market affected the sales processes and transactions of Everaus Kinnisvara?
The market’s downturn naturally impacted everyone and reaching sales was challenging last winter. However, Everaus Kinnisvara developments have been highly appreciated by clients, and sales continued after the winter downturn. In such a market situation, it was necessary to work harder in order to maintain sales levels and optimise costs wisely, but it is a natural part of doing business.
Our advantage was having ready-to-move-in apartments that allowed buyers to visit and move in immediately. Another advantage was having premium property whose clients are affected less by market fluctuations. Our premium-class developments are characterised by excellent locations, distinctive and aesthetic architecture, uncompromising quality, high comfort standards as well as modern and energy-efficient technological solutions. For example, the energy class A Kindlusepealse Villas have geothermal heating, heat recovery ventilation system and geothermal cooling, all supported by solar panels. All private houses and semi-detached houses are characterised by user comfort both indoors and outdoors. Individual electric car charging stations, smart home solutions, waste sorting systems, a fireplace in the living room and an ergonomic terrace bath are premium-class elements that appeal to homebuyers in the Järveküla development. More than half of the development volume was pre-sold to clients even before construction began, and today, only the last private and semi-detached houses are available
The premium Kindlusepealse Villas in the highly valued residential area of Järveküla will be completed in the summer of 2024. Photo: Everaus Kinnisvara
This year, there have been numerous campaigns – a free parking space, storage space, kitchen furniture, developer paying the Euribor for the purchaser, etc. What does that say about the property market and purchase demand?
Promotions and discounts depend a lot on the development phase. We have had successful pre-sales, which is why we have not felt any pricing pressure. To promote the sale of the last apartments in the Keila Home apartments, we also ran a summer campaign, offering buyers a parking space free of charge. Such campaigns, offering storage units, parking spaces, or kitchen furniture as incentives, are quite common in the real estate sector. Considering the overall property price, the associated cost is typically marginal.
Many property developers lowered apartment prices to promote sales. We did not have to do that, as we had a good product in a good location. Keila is a small town with an excellent infrastructure and a safe and green living environment that offers its residents the opportunities of a big city. The sales were also supported by the energy class A together with solar panels as well as spacious layouts with premium interior finishes.
