General Situation:
Excluding foreign buyers who need a , the Latvian real estate market in 2015 showed essentially the same sales results as the previous year.
In 2015, 47,577 purchases of various real estate properties were completed in Latvia. This is 1.5% less than in 2014, which is due to a decrease in the number of non-residents purchasing properties for residence permits.
Local buyers, on the contrary, in 2015 purchased apartments, houses, land plots and commercial property even slightly better than the previous year.
Out of the total number of transactions, 13,101 properties changed owners in Riga. Furthermore, the second half of last year exceeded the first half in the number of transactions by 23.7%. This suggests that Latvia's capital entered 2016 with a stable positive trend in buyer activity.
According to the magazine "Square Meter," if current indicators of Latvia's economic development are maintained, real estate sales figures for the country as a whole in 2016 may be higher than in 2015. A definite increase is expected in central Riga.
Demand:
According to a survey by SEB bank, 46% of Latvian residents surveyed in December predict an increase in housing prices over the next 12 months. This is the highest figure in the last one and a half years.
The optimism of residents, reflected in the forecast of rising real estate prices, is associated with growing incomes and improving purchasing power of the population.
Low interest rates and a state housing support program for families with children, which made mortgage loans more accessible, also play a role.
It is worth noting that Latektus, a company owned by SEB bank, concluded over 500 real estate sales transactions in 2015 for a total amount of 37.2 million euros.
In terms of volume, December 2015 proved to be the most productive month, when transactions totaling over 9.9 million euros were concluded.
In the new projects segment, 50 to 70 apartments are sold monthly. Two-thirds of transactions are two-bedroom and three-bedroom apartments with an area of 50 to 100 square meters, suitable for the needs of young families with children. The main criterion for choosing an apartment is its total cost. When choosing apartments similar in price, preference is given to the apartment with more rooms (even if these rooms are small in area).
Comparing the "primary market" segment (apartments in new projects) and the "secondary market" segment (apartments in panel buildings or projects built long ago), demand for apartments in new projects in 2015 increased by 8% compared to 2014.
As already mentioned, bank loans are of great importance. A young family (Latvian citizens) can obtain a loan for up to 35 years, up to 85-90% of the purchase price (applicable only to new projects), with an interest rate of up to 4% per year. Moreover, young families with children can obtain a government guarantee of 10 to 20% of the loan amount (depending on the number of children).
Supply:
In 2015, more than 20 new projects and renovated buildings were commissioned in Riga and Jurmala, with a total of 1,200 apartments.
In the near future, 10 more projects will be offered on the market, with approximately 400 apartments available.
Average price per square meter. According to the Latvian real estate association, the average asking price per square meter in new projects in central Riga (in December 2015) was 2,740 euros per square meter.
Conclusions:
If you are thinking about where to invest money to generate stable income in euros, purchasing an apartment or house in Riga will be a reliable investment. Prices for apartments in new construction in 2016 may begin to rise gradually, as there is steady demand for housing from local residents.
There is also a constant steady demand for rental of apartments and houses in Riga and Jurmala. By purchasing real estate today at the most favorable prices, you ensure yourself stable and continuous income in euros for many years to come.
If you would like us to offer you the most profitable options with high returns, write to us.
For a review of the Riga real estate market in summer 2017, see here
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