KOM-INVEST has analyzed the dynamics of the euro to ruble exchange rate over the past year (source: www.banki.ru), the dynamics of real estate price changes in Riga, and has prepared a brief summary. The analysis shows that purchasing an apartment in Riga is a reliable way to preserve your savings.
1) Euro to ruble exchange rate.
The chart shows that since June 23, 2014, the ruble has continuously "weakened" while the euro has become "stronger".
Thus, on June 23, 100 euros corresponded to 4,688.21 rubles, while on December 17, 2014, 100 euros corresponds to 7,615.16 rubles.
It is worth noting that the official exchange rate of the Bank of Latvia is less favorable. As of December 17, 2014, 100 euros corresponds to 8,217.28 rubles (source: www.bank.lv)
Thus, exchanging rubles for euros is more advantageous in Russia than in Latvia. Moreover, the exchange rates considered are official rates established by the central banks of Russia and Latvia. As a rule, in commercial banks and currency exchange offices, the exchange rate will be less favorable than the official exchange rate.
2) Dynamics of apartment prices in Riga.
After analyzing various information (transaction volume, advertised real estate prices, and prices of sold properties), KOM-INVEST has drawn the following conclusions: real estate prices in Riga are growing moderately.
For example, real estate prices in Riga's residential districts in January 2014 were approximately 1,065 euros per square meter (including new and old apartments), while in December 2014 the price is approximately 1,137 euros per square meter.
Real estate prices in central Riga in January 2014 were approximately 2,027 euros per square meter (including new and old apartments), while in December 2014 they amount to approximately 2,317 euros per square meter.
3) General conclusions.
After analyzing the information obtained, the following conclusions can be drawn.
- Exchanging rubles for euros is more advantageous in Russia than in Latvia.
- Given that the ruble is continuously "weakening" and the euro is becoming "stronger", purchasing real estate in Riga for the purpose of renting it out is a reliable way to preserve your savings.
- First, real estate prices in Riga show moderate growth.
- Second, by renting out an apartment in Riga, rental income will be in euros. If you choose an apartment with a payback period of 10-15 years, the rental income will be able to cover the investment in the apartment purchase. That is, the rental income will be able to cover the losses that may occur when exchanging rubles for euros.
- Third, purchasing an apartment in Riga for any amount (as well as any other real estate in Latvia) gives the right to obtain a Schengen multi-visa for the property owner and family members, valid for up to 5 years, with the right to permanent renewal.
- Fourth, purchasing real estate for 250,000 euros gives the right to obtain a residence permit in Latvia, and the buyer has the opportunity to relocate with their family to permanent residence in Latvia if desired. Obtaining a residence permit gives the right to work in Latvia.
Thus, KOM-INVEST encourages its clients not to wait for the currency exchange situation to worsen, but to purchase real estate in Riga. KOM-INVEST will provide consultations, help select real estate, assist with transaction documentation, help obtain a Schengen visa or residence permit, arrange rental of the property, and help resolve other related matters.
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