Rail Baltica Delay Has Not Yet Affected Pärnu Property Market
Real estate agents in the Estonian city of Pärnu say news of the postponed Rail Baltica completion date is too fresh to move property prices. Businesses and residents hope a train link to Tallinn will open in 2032.
The property market in Pärnu, a resort city in Estonia, has not yet reacted to the news that construction of the Rail Baltica railway has been pushed back. Rail Baltica is an international rail line intended to connect the Baltic states. Realtors say the announcement is too recent to show up in prices, and projects that have already started are going ahead as planned. Entrepreneurs and local residents hope the new deadline will hold and that in 2032 it will be possible to travel from Pärnu to Tallinn by train.
Investors already factor in delays
The completion date of Rail Baltica has been moved before. Ingmar Saksing, a broker at the company LVM Kinnisvara, told the ETV programme "Aktuaalne kaamera" that investors already take this into account in their plans. He pointed to growing interest in the district where a terminal will be built, as in Ülemiste in the capital Tallinn, and said prices and interest there are higher than before.
Over the past ten years, property prices in Pärnu have risen steadily by 2–3% a year after inflation. The delay has caused no sharp jumps up or down. Terje Võrk, a broker at Arco Vara, said people tend to weigh other factors when deciding where to live, and that a railway does not mean everyone will want to move; some may only visit for the day and return home in the evening.
Several new apartment buildings have appeared in different parts of Pärnu in recent years. Saksing considers this a positive trend, since new supply gradually lifts demand. About 400 apartments are currently under construction or on sale, and at the present sales pace they would take up to two years to sell unless new projects appear.
Hotel project continues
The Part spa hotel on Pärnu beach is due to be completed by next autumn and will add 450 hotel places to the city. Project manager Sari Sopanen said the railway delay did not change the hotel's development plans, but finishing Rail Baltica would certainly help attract more customers. He said a connection to both the Tallinn and Riga international airports would be a major advantage for the industry.
Sopanen also argued that construction will never be cheaper than it is today. In his view, if Rail Baltica had a clear schedule, a concrete plan and funding, building now would be considerably more cost-effective than in a few years.
