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On rental market, importance of energy efficiency is on the increase; due to bulky utility costs, prices may soon start dropping.
High demand for rental apartments in Tallinn and Tartu has pushed prices up, with no further space for growth detected by economists. Rather, considerable utility costs may serve to press the prices down.
Rental market continues to be active; still, it does not compare to 2011, when prices skyrocketed and it was nearly impossible to find vacancies in summer and autumn.
Offers are as abundant now; but there is no such rental boom as two years back, says Tõnu Toompark of the consultancy Kinnisvarakool.
According to offer prices at KV.ee portal, Tallinn’s average is up 14 per cent over a year.
Mr Toompark predicted definite but moderate rise in rental prices in near future; however, the rise will be slower than the abovementioned 14 per cent, as demand will not hook up to a higher price rise.
According to him, logic predicts that rental prices rise to the tempo of apartment sale/purchase prices. «Apartment prices have risen to a level that has begun to hinder purchases. Sale/purchase prices rise will probably slow down. That, in turn, will slow down the rental price rise,» said the expert.
Anna Roostar, a broker at Arco Vara, Tallinn, said that rental prices yearly shoot up in August, as student come to town. «Price rise is felt in July, August and the first week of September. Thereafter, the prices go down again, remaining more or less stable throughout the rest of the year, demand being moderate,» said Ms Roostar, adding that new apartments seem to be in greater demand. «People are willing to pay more for decent and clean flats.»
Pindi Kinnisvara board member Peep Sooman added that while rental flats with favourable utility costs are priced upwards, there is little interest towards flats with poor energy efficiency and in such cases the prices are decreasing, rather. «If a flat is energy efficient, one may ask for higher price,» advised he.
Kristina Sõmerik, broker at Uus Maa Kinnisvarabüroo real estate agency, said there are also many students moving to other towns for whom parents purchase flats. «Often, this is cheaper that rental. Plus the added feeling of security and the prudency of investment,» noted Ms Sõmerik.
In the words of Liisu Arumäe, seeking for a rental flat in Tallinn, it was no easy job. «It was very difficult,» she stressed. Ms Arumäe related that, to begin with, she and her companion set €400 as a ceiling and sought a two or three room flat in central Tallinn.
Which proved impossible. Then, they raised the bar to €450 – alas! all suitable flats were snatched up right before their noses. «We just kept being late,» she said.
Then they went for €500. Doing this, regrettably, was not enough. Ms Arumäe said her partner being a programmer, he was able to create a robot which sought for suitable flats in various portals and let them know immediately.
Thanks to this method only, Ms Arumäe succeeded in securing a two room rental flat in Süda Street, for €490 plus utility costs. «We would have liked something cheaper, but what do you do,» said she, adding that she is still satisfied as the apartment is pretty and the location lovely.