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Markt report about situation on July 2011


RENT PRICES grow, DEMAND FOR REAL ESTATE AGENTS’ SERVICES falls

Standard-type apartment mid-price after 7 months in 2011 is 601 EUR/m2. Every month there were minor fluctuations in the price. The opposite situation is characterized in the rental segment – in the last 3 months rent prices have increased by 6%, what is a result of insufficient supply. The situation in the real estate market has become unstable, soon will survive only the "strongest" and most innovative companies.

"The first half of the year in the real estate market was marked as a period of stagnation. Also in July, significant changes have not occurred. Assessing the market conditions and events in the past seven months, we can conclude that the main index in a secondary market  - the price is 601 EUR/m2. We expect that in the summer holiday period the situation will not become better, the growth can be expected from September," the market situation explains the head of the company BALSTS Aigars Zarins.

      "Last month we predicted a sharp increase of the rental prices in Riga and Jurmala due to the contest " New Wave ", which could result an increase of the Russian citizens' interest about a residence permits too. Just in September we will be able to judge the fulfillment of our forecasts. Currently assessing the situation in the real estate market, we can see a lack of qualitative rental apartments, specially with a most demanded area – 2 and 3 rooms apartments. Bank subsidiaries now have taken over many apartments that are not yet available in the market, people who own the apartments, have already rented them out. Banks do not grant the credits due to the low income level, so people prefer to live in rented dwellings. As a result of all these events is a supply reduction and in the last 3 months rent prices have increased by 6%, "commented Mr. Aigars Zarins.

      "The competition between the real estate companies becomes fiercer, because people often choose to sell or to rent their real estate without real estate agents’ services, which happens due to the big internet influence. All services, such as advertising opportunities, are becoming more accessible to every individual. The bank data shows that the number of the assigned mortgage loans hasn’t decreased, it stays in the same level, but the number of clients who comes to the bank with their real estate agents has significantly decreased. This fact shows the most that the demand for real estate agents' services is falling. Foreign citizens' interest in the real estate companies’ services are equally as high as in the past, interest is falling directly from local consumers. Unfortunately, homeowners do not realize that real estate sales process has several stages, which require an experienced and knowledgeable professional, such as the setting the right price, a professional marketing campaign, designed individually for each object, the right object presentation of a prospective buyer, a professional agreement on the final price between the buyer and the seller, the most advantageous funding for the purchase of the real estate as well as the correct  transaction’s legal side processing. In these market conditions, while local consumers do not understand that, just the „strongest” will survive, and those will be companies which will be such innovative to be able to bring in the market new service that will attract local residents, " the real estate market evaluates Aigars Zarins.

 

More information you will get:

BALSTS, Audeju Street 8,

Mob.: + 371 67076191

Fax: + 371 67076199

info@balsts.lv, www.balsts.lv

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