First, the bubble of 2005-2006 will most probably never happen again.
Everybody have to get used to a usual (i.e. competitive) market.
On average, Real Estate grow anyway over the years. It is a slow but
safe investment for an educated investor.
Currently, supply is high at high price, demand is low at such high price in new residential projects, it is rather the opposite in Commercial, it will evolve back and forth over time.
Also currently the emotional part (i.e. residential, reaching private
households) is low, combined with a low in the overall Estonian economy,
which lead to some kind of depression. But it is actually a great time
for buyers and investors to invest at low price and sell later at high.
But again, do not expect +100% in one year as it has happen previously
Basically, the government has to keep on a strong long-term strategy for
the country to make local estonian positive about their future, Real
Estate companies to keep on developing the training of their team to
provide right advice to their clients (buyers/sellers) to make happy
clients in each period of the economical cycles, the dynamism in the
market is already there !
2. What kind of changes can be expected on Estonian real estate market in 1-2 years?
Market is currently growing in commercial, at very low in new
residential projects, but second market and rental are on growth.
So, mechanically, in few years, commercial will slow down, demand in new
residential will grow while supply in this sector will fall, second
market and rental will keep on complementing on the on-going market.
Still, the ownership of houses is high in Estonia compared to other
European countries, but the square meters per inhabitant is still low,
therefore, residential will go through a lot of cycles before loosing
his dynamism, and second market will most probably still keep strong.