There are two main areas to consider when buying investment
property in Estonia and these are Estonia's capital city
Tallinn and along the Baltic Sea Coast in flourishing areas such as
Parnu. The property market in Tallinn is established but still
young, whereas elsewhere in Estonia international interest in
property has yet to take off, meaning the capital is an obvious
choice for first time buyers. There's also undoubted potential
along the beautiful coastline, but investors are yet to take the
plunge here.
Like the rest of the Baltics, demand in Estonia is being fuelled
by easy credit, growing wages and an increase in the numbers of
households per capita. In general, Estonians prefer to buy rather
than rent, with rental demand dominated by foreign workers.
Tallinn
The property market is thriving in Tallinn with prices set to
rise. Located on Estonia's north western coast across the Gulf of
Finland from Helsinki; Tallinn is the Baltic gateway to Scandinavia
with daily sea links to Helsinki and Stockholm. Tallinn is one of
the most beautifully preserved medieval cities in Europe; the
attractive old town with its cobbled streets and onion shaped
towers is definitely worth a visit. Apartments in this area are
very popular and many of the older buildings are bought and then
converted into flats.
There is limited construction capacity due to the lack of local
skilled labour, meaning that future supply growth will be slow.
With demand beginning to catch up with supply though, as far back
as 2006, the property market levelled out considerably.
At present, growth in the property market has paused as prices
realign themselves to more affordable levels and potential
investors wait to see the outcome. Future investment potential
could become strong again but at present Estonia will not be an
investor's first choice.
The Baltic Sea Coast
Property on the outskirts of the city is certainly worth
exploring, and new beachfront developments are likely to prove a
good investment, while the 'summer capital' of Parnu is starting to
market itself to overseas house hunters. The Estonian coast has
some historically well known areas for holidays, including the
islands of Hiiumaa and Saaremaaand. On the mainland, Parnu is the
health resort town that everyone is heading for, with its stretch
of white sand beach and picturesque old town centre.
Pärnu is becoming more attractive with the increase of domestic
purchasing power and many new projects are cropping up providing
apartment houses, holiday homes and leisure activities around the
Pärnu area. Building on a late 19th-century tradition of mud baths,
Pärnu continues to cultivate a thriving health resort industry. Be
sure not to miss Parnu's new Tervise Paradiis health resort complex
just adjacent to the beach where new-build prices in the
vicinity are reaching levels comparable to those
in Tallinn.
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