Estonia, Real Estate

The addition of new and more expensive rental apartments on the market is behind the increase in rental prices, the portal said. The rental price of those apartments is higher than the market's average and thus has an impact on the average price. The price of equivalent apartments has increased 0-5% compared to last year, Kv.ee said.

Even though the price of apartments in Tallinn has increased compared to last year, the fast increase in the number of rental offers is keeping the rental prices lower than the equivalent increase in the value of the real estate, the company said.

"The landlords usually know how to garner the attention of the tenant first and foremost with the aid of a favorable price. Competition between the landlords is the factor, which does not allow rental prices to be raised as desired," head of the Estonian real estate portal Kv.ee Tarvo Teslon said.

He estimated the average rental price to also increase next year. "A number of new developments are being built in Tallinn, where investors are buying apartments with the aim of renting them out. It is likely that the average rental price will increase even more because of that as apartments with higher rental prices are added to the market," Teslon said.