Every real estate market participant would like to know when it is most advantageous to sell and when to buy property.
Of course, this is impossible to predict. But what can be done is to analyze market trends, monitor supply and demand, and use the data obtained when making decisions.
For example, an increase in bank interest rates will reduce demand for mortgages. Consequently, young families will not be able to afford expensive housing.
"For example, if the average loan amount taken to purchase an apartment is about 105,000 euros, and the monthly payment with 0% Euribor was close to 460 euros, then now, when the Euribor rate is approaching 3%, the payment has reached 620 euros, which is 36% more".
As for loan issuance, previously, a family's income would allow them to count on purchasing an apartment worth 105,000 euros. In the new reality - this is 75-80 thousand euros.
That said, one should not expect a significant decline in housing prices.
"Thinking about the development of the real estate market in the next six months, we can expect a slight decrease in the number of transactions." But it all depends on the segment!
Quality housing (energy-efficient apartments in new projects), of which there is very little on the market, will be in demand, and you should not expect price reductions.
Moreover, construction costs will not decrease in the near future, and there is no reason to expect price reductions for apartments in new construction or quality housing.
In the luxury housing segment in central Riga and Jurmala, no radical changes are foreseen, and transactions will be conducted at the same volume as in 2022. In the historic center of Riga, the supply of quality housing is limited, and no new premium segment projects have been announced for next year in the center. There will always be clients who want to live in the historic heart of Riga, who appreciate the charm of historic Art Nouveau architecture and the developed infrastructure of the area.
Negative price correction will affect inefficient housing, large private houses with an area of more than 300-400 square meters, which were built 20 years ago and are morally and technically outdated, as well as serial apartments located in buildings in poor technical condition, where it is impossible to agree on necessary improvements due to the inability to collect a majority vote of co-owners.
As for rental, rental prices in 2022 increased by 10-20%, and there is reason to believe that in 2023 demand for rental housing will increase, as those families who are postponing a final decision on purchasing property will rent.
Source: https://www.varianti.lv/ru/novosty-i-analytika/8785-v-2023-godu-prodolzhim-dvizhenie-vpered,-no-s-pjatoy-peredachi-pridetsja-perekljuchatsja-na-tretju
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