This study identified the market demand for apartment characteristics in Tallinn, Estonia with special focus on the connection between public transportation service levels and apartment attractiveness. As a research method, discrete choice modeling was used. The data was collected using stated choice experiment. The study revealed that the heating type has the highest impact on apartment attractiveness with central heating being highly preferred and electric heating immensely disliked. Unforeseen substantial importance of the heating type – preceding even the apartment location – could be attributed to raising energy prices and importance of heating in Estonian climate, demonstrating Tallinn’s residents concern with utility costs when buying an new apartment and suggesting to housing developers that more energy efficient buildings could be sold faster and with higher profit margins.
Regarding public transportation, the results indicate that PT frequency has significant effect on apartment attractiveness in Tallinn. This demonstrates: firstly, the overall importance of PT service levels in residents apartment buying decisions; and secondly, the potential for the City of Tallinn to implement more transit-oriented development in order to create sustainable urban environment for its residents. The importance of PT frequency was nearly equal for both frequent and infrequent PT users, suggesting the willingness to use PT in both groups, however indicating certain factors currently hindering the PT use of the infrequent users. The author suggest analyzing the Tallinn’s PT system as a whole (with special focus to be given to new housing areas) and setting a public transportation development strategy to achieve greater urban sustainability.