Homebuyers expectations and real estate market trends – where are we headed?

The real estate market and homebuyers expectations have changed significantly in recent years. Energy efficiency, smart solutions, and spaciousness have become top priorities, while location and budget still play a decisive role, says Kristel Pisang, Head of Sales at real estate developer Arco Vara AS.

When choosing a home, buyers seek a balance between size, practicality, and cost. At the same time, the handover of a new home is an important step that requires attention to many details. What kind of compromises do buyers make, what should be considered during the handover process, and which factors are likely to affect the real estate market in the coming years?

Spaciousness and energy efficiency are key priorities

According to Pisang, the home search generally starts with the budget, but location is no less important. When it comes to finding the right home, compromises often need to be made in one area or the other. “If there are no suitable offers in the preferred location, buyers often expand their search area to get a larger home for the same money. However, if location is the top priority, they may be willing to increase their budget or settle for a smaller space,” she explains.

When choosing a specific home, practicality and cost-efficiency become the deciding factors. The pandemic changed the way people live and work, and according to Pisang, this is reflected in home preferences. “Compared to the past, people now prefer more spacious homes and the ability to adapt rooms as needed, such as for a home office,” she says. The importance of storage spaces, such as utility rooms and walk-in wardrobes, has also grown. In addition, more attention is paid to energy efficiency to keep utility costs under control.

Pisang notes that expectations vary clearly between different buyer groups. “Young people buying their first home value the surrounding environment, infrastructure, smart home solutions, and places to store bicycles. For families, yard safety, sufficient space for each family member, and convenient access to schools and kindergartens are more important,” she explains. Proximity to green areas is important for both groups, and coastal areas have always been highly sought after.

Informed buyers know how to recognise quality

According to Pisang, buying real estate is not just about finding a seemingly suitable living space. Although it is one of the most significant decisions in many people’s lives, the handover stage of the home can raise questions that often go unnoticed. “For example, many people aren’t quite sure what to look for during the inspection of a new home,” she points out as a key challenge.

To help prevent such issues, Arco Vara and other developers provide their clients with recommendations and guidance to ensure a smooth home buying process. It is important to know what to inspect during the construction review and apartment handover in a new development. “If the buyer lacks sufficient expertise, we always recommend involving a certified expert,” says Pisang.

What trends can we expect in the real estate market?

Smart home solutions that allow real-time cost monitoring, flexible and well-planned layouts, and diverse storage options are gaining momentum in the real estate market and are taken into account by Arco Vara when designing new projects. As for real estate prices, the sales manager does not foresee major fluctuations in the coming years – if anything, a slight increase rather than a decrease. According to her, market dynamics depend mainly on interest rates, inflation, and economic growth.

“European Central Bank interest rates directly affect homebuyers’ loan costs – if rates fall, demand may increase, but if rates remain high, buying interest could decline,” Pisang explains. Inflation also plays a role – if it stays high, it impacts both construction costs and borrowing capacity. “If developers build less due to high construction costs, for example, supply may decrease, and prices may remain high,” she adds.


The labour market and economic growth also matter – if wages rise and the economy grows, people’s purchasing power increases, which can drive property prices up. “In the bigger picture, investing in real estate – whether buying a home or placing capital – has always proven beneficial in the long run, as the value of real estate tends to rise over time,” Pisang concludes.

Arco Vara on rahvusvaheline kinnisvarakontsern, mis tegeleb elukeskkonnale lisaväärtust loovate arendusetega. Arco Vara põhitegevuseks on terviklike elukeskkondade ja nendega seonduva ärikinnisvara väljaarendamine. Arco Vara põhiturgudeks on Eesti ja Bulgaaria. Emaettevõte Arco Vara AS loodi 1992. aastal Eestis ja on alates 2007. aastast olnud noteeritud Nasdaq Tallinn väärtpaberibörsil.