According to Statistics Estonia, the construction price index increased by 2% in the first quarter of 2026 compared with the first quarter of 2025, and by 0.5% compared with the fourth quarter of 2025.

📊 The construction price index shows how construction costs change across three main components: labour, building materials, and construction machinery. The index covers four types of buildings: detached houses, apartment buildings, industrial buildings, and office buildings.

📈 In annual terms, building materials recorded the strongest increase. Compared with Q1 2025, they became 2.5% more expensive. Labour costs rose by 1.5%, while the cost of using construction machinery increased by 1.2%. Materials accounted for 75% of the annual growth in the construction price index.

🔎 By building type, the increase also affected the residential segment:

— detached houses: +1.9% year-on-year;
— apartment buildings: +2.1% year-on-year;
— office buildings: +2%;
— industrial buildings: +1.9%.

🏡 For the real estate market, this means that construction activity in Estonia is not frozen. Costs are rising moderately but steadily: materials are becoming more expensive, labour costs are increasing again, and the quarterly index shows positive momentum. In Q1 2026, wages and building materials were the main contributors to the quarterly increase, together accounting for 89% of the total growth in the index.

📌 This indicator is important for buyers and investors because rising construction costs usually limit developers’ ability to reduce prices for new properties. Even if demand becomes more cautious, construction companies still face objective cost pressure. This is especially visible in the new-build segment, where the price per square metre directly depends on the cost of materials, labour, and construction financing.

🏙 In the short term, rising construction costs may support prices for new projects in Tallinn and other Estonian cities. For buyers, this means that expecting a significant price decline for high-quality new-build properties may not be realistic. If construction costs continue to rise, developers are likely to be more cautious with discounts, especially in projects with strong locations and limited supply.

🔎 You can explore available property options in Estonia for investment or living on our website.