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Market report about situation on September 2011


LATVIANS PREFER STANDARD TYPE APARTMENTS, FOREIGNERS – APARTMENTS IN NEW PROJECTS

After the company’s BALSTS observations during recent months in the real estate market more and more visible is following trend - local people are interested in standard type apartments, foreigners – in new projects. Rental market continues to evolve, more and more people choose to rent rather than buy a property.

Local Latvian residents are showing greater interest about standard type apartments near the center or in residential areas, while foreigners, those who are interested in obtaining a temporary residence permit too, are interested in qualitative apartments in new projects or renovated pre-war houses with all amenities and good location – in the center of Riga, or in Jurmala -depending on how much they plan to pay for the property. Generally, foreign nationals who wish to obtain a residence permit are looking for property worth 150 000 – 200 000 EUR. This, of course, can be explained by people's ability to pay. The difference in standard type apartments and new projects price is large - while the average price of standard type apartments stays unchanged and is 600 EUR/m2, the new projects’ price is from 1000 to 1600 EUR/m2, depending on trim level and location.

 

Already since the mid-2010 is a noticeable foreign citizens' interest prevail over the local people's interest in real estate acquisition. During this period was 328 applications from investors about purchasing a property to obtain a temporary residence permit. The largest transactions in money that have occurred in this regard  were 594 000 LVL, 437 000 LVL, 422 000 LVL. Latvian residents are very careful in choosing a property, they evaluate all the pros and cons and are seeking the most favorable credit terms. Often the bank refuses to credit because of too low incomes. Foreign residents are not as fussy in choosing a property, for them often the key is to match the price for the property they are ready to pay and housing opportunities should have high quality.

 

The current economic situation in the country contributes rapid activation of the rental market. If up to now has always been the fact that Latvian citizens want an ownership of apartment, then now, involuntarily, public opinion is beginning to change. Due to problems in obtaining a credit, the demand for rent continues to grow. Consistently low is supply for good and qualitative apartments, so rental prices are gradually rising, last month growth was 1.5%. Also in the next six months we expect the growth of rental prices, despite the start of the heating season.

 

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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