Residential Real Estate Leases - Estonia

The estimated revenue of the Residential Real Estate Leases market market in Estonia is projected to reach US$937.30m in 2024.
Apartment Leases dominates this market segment with a projected market volume of US$780.70m in 2024.
The revenue is expected to exhibit an annual growth rate (CAGR 2024-2029) of 3.70%, which would result in a market volume of US$1.12bn by 2029.
The demand for residential real estate leases in Estonia has been steadily increasing, driven by a growing population and a stable economy.

Definition:

The residential real estate leases market refers to the market where landlords and tenants enter into agreements for the rental of residential properties, such as apartments, houses, and condominiums. The lease outlines the terms of the rental agreement, including the duration of the lease, the amount of rent to be paid, and the responsibilities of both the landlord and the tenant. The lease may also include provisions for security deposits, maintenance and repair obligations, and renewal options.

Structure:

The residential real estate leases market comprises the lease of houses and apartments.

Additional information:

The residential real estate leases market includes the following KPIs: the revenue generated by real estate leases, the number of real estate leases, the average revenue per real estate lease, the share of dwelling type of tenants, and the average room per tenant. The dwelling type shares comprise the shares of the renter population that lives in houses and apartments.

Residential house and apartment leases

Real estate transactions
Commercial real estate
Accommodation services, such as Airbnb

The Residential Real Estate Leases market in Estonia has been experiencing steady growth in recent years. Customer preferences in the market have been shifting towards rental properties for several reasons. Firstly, renting offers flexibility and mobility, allowing individuals to easily move to different locations without the commitment of purchasing a property. Secondly, renting provides a more affordable option for those who may not have the financial means to buy a home. Additionally, the younger generation is increasingly prioritizing experiences and lifestyle over homeownership, leading to a greater demand for rental properties. One of the key trends in the market is the increasing popularity of short-term rentals, particularly in popular tourist destinations such as Tallinn. The rise of platforms like Airbnb has made it easier for property owners to rent out their homes or apartments on a short-term basis, catering to both domestic and international tourists. This trend has not only provided property owners with an additional source of income, but has also contributed to the growth of the tourism industry in Estonia. Another trend in the market is the growing demand for high-quality rental properties. As more individuals choose to rent rather than buy, there is a higher expectation for rental properties to offer modern amenities and a comfortable living environment. This has led to an increase in the construction of new rental properties that cater to these demands, including apartments with modern designs, energy-efficient features, and communal facilities such as gyms and rooftop gardens. Local special circumstances in Estonia have also contributed to the development of the Residential Real Estate Leases market. The country's relatively small population and limited land availability have resulted in a shortage of housing supply, especially in urban areas. This has created a competitive rental market, driving up rental prices and making it more profitable for property owners to rent out their properties. Underlying macroeconomic factors have also played a role in the growth of the Residential Real Estate Leases market in Estonia. The country's strong economic performance, low unemployment rate, and increasing disposable income have contributed to a higher demand for rental properties. Additionally, low interest rates have made it more attractive for individuals to invest in real estate and become landlords. Overall, the Residential Real Estate Leases market in Estonia is developing due to changing customer preferences, such as the desire for flexibility and affordability, as well as the increasing popularity of short-term rentals. Local special circumstances, such as limited housing supply, and underlying macroeconomic factors, including a strong economy and low interest rates, have also contributed to the growth of the market.

Data coverage:

Figures are based on total and average revenue of residential apartment leases.

Modeling approach:

Market size is determined by a bottom-up approach. We use national statistics, international organizations, and industry associations to analyze the markets. To estimate the market size for each country individually, we use relevant key market indicators and data from country specific industry associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita.

Forecasts:

We use a variety of forecasting techniques, depending on the behavior of the market, for instance, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.

Additional Notes:

Data is modeled using current exchange rates. The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

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Residential Real Estate Leases - Estonia

Volume

Analyst Opinion

Revenue

Affordability

Real Estate Type

Living Space

Methodology

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