Bank of Estonia economist Taavi Raudsaar said the central bank has seen the housing loan market revive over the past year and a half, a trend confirmed by this year's data.

"In the first ten months of this year, about 15 percent more loans have been taken than in the same time last year," Raudsaar said. He added that the average loan amount has risen about 9 percent.

The economist said improving consumer confidence is part of the reason for the increase. Some people may also be taking loans now in anticipation of next year's planned income tax changes, which could leave them with more disposable income.

The average mortgage term in Estonia is 26 years, with the average loan size rising from €130,000 a year ago to €140,000 today.

Swedbank mortgage area manager Anne Pärgma noted borrowers this year are making more deliberate decisions.

"Applications are down 13.5 percent compared with last year," Pärgma said. "But at the same time, about 30 percent more loan agreements are being signed." She explained that those applying today are more confident in their transactions and have already identified properties to buy.

She noted that the Euribor has fallen about one percentage point on year, reducing monthly mortgage payments. "It depends on the exact loan amount, but for the average loan, it's roughly €80 less per month," she said.

Real estate group Endover is developing the Volta Quarter in Põhja-Tallinn — with 90,000 square meters of residential space, much of it already sold. CEO Roul Tutt said the area is Tallinn's fastest-growing, pushing new development prices above city center levels.

Tutt said Estonia's real estate market is showing clear signs of revival.

"The market has matured and is ready to absorb new properties," he said. Lower interest rates and market stability support this trend. "The bottom has been reached," he added, "and from here we expect stable growth."

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