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Market report about situation in 2011


After the real estate company’s BALSTS observations in 2011 there was a significant drop in prices - 7.3% - in a segment of standard-type apartments. The opposite situation is observed in the center of Riga and in new projects where the price increased by 7.69%. Assessing the market as a whole it cannot be said that it would be revived. A similar situation is also foreseen in 2012. We forecast an increase of prices and increase of activity in the center of Riga.

"During the year 2011, the main real estate market’s controller - price of standard-type apartments - experienced a significant decline - 7.3% and in the end of the year is 601 EUR/m2. Conversely, in the center of Riga and the Old Town, as well as in the segment of new projects. As a result of investors' growing interest in these market segments the average price has increased by 7.69%. At the end of 2011 the average price of apartments in the center is 1211 EUR/m2, and of apartments in new projects is 1320EUR/m2. Rreviewing the events of 2011, we cannot say that the real estate market would be revived. Although in the center of Riga and Jurmala was observed a significant increase of activity and  the price increase, but the number of transactions in these segments is not significantly increased. At the same time, standard-type apartment’s prices have fallen. Overall viewing the whole market without people's emotional assumptions it can be argued that the 2011 for the real estate market has been a year of „stagnation,” explains the CEO of company BALSTS Aigars Zarins.


"Commercial segment in 2011 for a short time was in the stagnation phase, but during the year it has returned to a slow growth. This is evidenced by such indicators as the A and B class office building in Riga within the fill of 75-80%. Remaining areas are offered for a 10 - 15% higher rent. There are only a few office buildings that can meet the demand for areas above 3000 m2. Treade areas in center of Riga have been applied in active places with high pedestrian flow. In such places rent ranges 15-25 EUR/m2, of course there are exceptions. In the segment of warehouses there are no large movements, the niche is specific because of long-term lease agreements, and many companies have their positions fixed in the previous two years.


In rental market in 2011 is observed a price increase, which can be explained by lack of supply. Mainly there is observed the lack of qualitative apartments with the most demanded area - 2 to 3 bedroom apartments. Banking subsidiaries now have taken over many apartments that are not yet available in the market, people who owned the apartments, has successfully rented them. Because of the low income level many banks do not grant loans, so people choose to live in a rented places. In a result of all these events demand has grown considerably, while supply has decreased, and in 2011 the rental prices have risen by 8%, "says Mr. Aigars Zarins.


"We cannot predict a significant price changes in 2012. Year will be "flat", with no significant fluctuations and the maximum price increase in the real estate market, which can be achieved in some segments in the next 12 months is 5%. Of course, we expect that a customer activity will increase, but there will not be the real result of this, because in the country there is still the situation that the banks grants loans, but because of the low solvency only a small part of latvians can get them. The largest demand in Latvian real estate market currently is based on foreigners, mostly residents of the former CIS countries. Foreign investors choose to invest in good quality and beneficial properties, therefore, in the 2012 we forecast a customer activity and a property price increase in the center of Riga. Apartments in the center are the most successful investment opportunity because, unlike in Jurmala, where now prices are too high and do not reflect the real market situation, properties’ price in the center of Riga are adequate for the current situation and in the future these properties may also bring a profit, because they can be successfully rented, and as it was mentioned, now in the rental market is a lack of qualitative apartments, demand considerably exceeds supply. In Jurmala growth can not be predicted. Eastern investors, who make a major demand is well informed about the economic situation in the Latvia and are not willing to overpay for real estate. As already mentioned, in Jurmala prices are exaggerated, potential buyers understand that, so in 2012 they will be more interested in the center of Riga.


At the end of 2011 BALSTS index was 125, in the beginning of January it is 126, and we expect that at the end of 2012 it may reach 130 point scale, "predicts Mr. Aigars Zarins.

More information you will get:

BALSTS, Audēju Street 8,

Tel.: + 371 67076191

Fax: + 371 67076199,


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