Buying a Home in Estonia - Price to Rent Ratio

If you want to buy a home in Estonia, after reading the quick Estonian economy review and about Price to Income Ratio you can evaluate if the real state market is over or under valuated using the Price to Rent ratio.

Price to Rent Ratio

When evaluating if a home is affordable, one measurement frequently used is the Price to Rent ratio, defined by average house price divided by the average yearly rent price. Historically in America, this ratio fluctuates between 15 and 25, where a value below 15 means it's cheaper to buy than rent, and higher values can indicate an overpriced house (or a bubble). The European Union Housing Price Index shows an all time low in Housing Price to Rent ratio, and the Global Property Guide European Price to Rent ratio shows how each country compares.

Estonian Price to Rent ratio

Let's see how Estonian Real State market fare's using this simple index.

Tallinn Price to Rent ratio

Since Tallinn is a special case in Estonia, let's take a look at it separately.

Big Picture

Even though the values above don't seem so good, Estonia has almost the lowest of European Price to Rent ratio. However, this lists compare upscale  houses with "Average per square meter prices in US$/€ of 120-sq. m. apartments located in the center of the most important city of each country".

Using Numbeo World Price to Rate map we can see that Estonia has a high but not so high ratio, compared to other world capitals, but I'm not sure how this values are calculated, so take it with a grain of salt.

What do you think, would you still buy a home in Estonia? Share it in the comments.


Tallinn Municipal Elections - parties and candidates

Soon Estonian citizens (and foreigners with permanent resident permit) will be voting for Estonian Local government council elections to choose the new Tallinn Mayor and City Council (63 councilors) in October 20th, 2013.

This starts a series of Estonian elections (local government in 2013, European parliament in 2014, National parliament in 2015 and president in 2016) urging political parties to get ready for the big race.

And this year elections got more interesting with expats running for local city council, Abdul Turay (from SDE), pledging to represent the foreigner community in Estonia, followed by John Slade (from Keskerakond).

Estonian Political Parties

Estonia has a multi-party system, where the biggest parties (by parliamentary representation) are Reformierakond (Reform party), Keskerakond (Centre party), IRL (Pro Patria and Res Publica Union) and Sotsiaaldemokraatlik Erakond (Social Democratic party).

You can see the last Estonian elections results for Local Government in 2009 and for Parliament in 2011 to get a picture of the players in 2013 elections:

Tallinn Municipal Elections results 2009 (total votes: 212828)
PartyVotesPercentage of total
Eesti Keskerakond11401353,5%
Eesti Reformierakond3549016,6%
Erakond Isamaa ja Res Publica Liit3293915,4%
Sotsiaaldemokraatlik Erakond209289,8%
Erakond Eestimaa Rohelised46552,1%
Erakond Eesti Kristlikud Demokraadid6370,2%

Tallinn Mayor Candidates 2013

The current candidates for Tallinn Mayor are:
  • Edgar Savisaar (the actual mayor, from Keskerakond)
  • Valdo Randpere (Reformierakond)
  • Eerik-Niiles Kross (IRL)
  • Andres Anvelt (SDE)
  • Mart Helme (from Conservative People's Party of Estonia, newly created in 2012)

And did you know that Tallinn already had foreigner politicians? Abram Petrovich Gannibal, the grandfather of Russian author Pushkin, was the superintendent of Reval from 1742 to 1752. Talk about small world!