Homebuyer trends in 2025: fewer square metres, higher quality

Homebuyers’ expectations have shifted rapidly in recent years, and a clear trend has emerged on the real estate market this year: compact, energy-efficient homes with well-considered layouts are in high demand. According to Elari Tamm, Sales Director of real estate developer Arco Vara, buyers are highly conscious and are willing to pay only for features that genuinely support everyday living.

Just a few years ago, energy efficiency dominated purchase decisions, but today low noise levels have taken the top spot. “The most valued quality in a home is good sound insulation. Peace and quiet have become extremely important,” Tamm said. This is also confirmed by a recent Kantar Emor survey, which shows that low noise levels have become one of the most essential criteria for buyers of new developments in Tallinn and its surrounding areas.

That said, the importance of energy efficiency has not disappeared. Instead, it has become an expected standard. “Homes must be energy efficient because with high energy prices, people want to keep their monthly costs predictable and under control,” Tamm explained. Questions about future utility expenses are now raised very early in the home-buying process.

The biggest shift in home selection has been driven by price pressure, steering buyers towards smaller yet more functional apartments. “Buyers prefer compact spaces with practical layouts,” Tamm noted. One-room apartments are typically around 25 square metres, two-room homes around 40 square metres, and three-room apartments generally around 60 square metres. Four-room apartments tend to be approximately 80 square metres. People no longer want space they do not actually use – they want a home that is thoughtfully designed and fits their needs precisely.

The layout itself has become one of the most important decision-making factors. The Kantar Emor survey confirms that the internal logic of an apartment is at least as important to buyers as location, and Tamm sees the same pattern. “Buyers think very carefully about how they will use the space. A well-planned layout is highly valued, while impractical solutions stay on the market longer,” he said. The need for a home office also remains, and according to Tamm, buyers increasingly seek homes where rooms can be adapted flexibly – for example, where a three-room apartment can be converted into a four-room layout without complex reconstruction.

Location and a well-designed living environment remain top priorities

While buyers are willing to compromise on square metres, they are not willing to compromise on location. “The priorities are clear: location and budget,” Tamm said. Homebuyers want workplaces, schools, kindergartens, and shops to be within reasonable distance, and they expect convenient access by both car and public transport. According to the Kantar Emor survey, even more attention is now paid to infrastructure and transport connections than a few years ago.

The overall quality and coherence of the development have also become increasingly important. Buyers want a living environment that is well considered from the apartment door all the way to the outdoor area. “People appreciate developments where everything – from layouts and lobbies to corridors and outdoor spaces – has been thoughtfully designed,” Tamm noted. “Shared facilities such as saunas, small wellness areas, and green spaces are becoming more popular, providing added value and strengthening the sense of community,” he added.

Expectations vary slightly by age group, but the overall picture is similar. “Young first-time buyers prioritise cost-efficiency and smaller spaces and consider the ability to work from home essential. Families and older buyers increasingly value multifunctional rooms, terraces, and proximity to nature, but they too place high importance on low long-term costs,” Tamm explained.

Tamm advises homebuyers with a limited budget to start by mapping out suitable areas. “If the budget is fixed, it’s wise to identify the neighbourhoods where there are realistic options within that price range. If necessary, it is worth considering a slightly wider search area,” he said.