In early April, a conference of the Association of Real Estate of Latvia took place in Riga, where the prospects for the development of the real estate sector for the next two years were discussed. The conference was attended by representatives of banks providing lending opportunities for buyers, as well as major developers.
As a result of the reports and discussions, conference participants concluded that in the coming years there will be an increase in prices for apartments in new projects.
There are several reasons for this:
First, local citizens are becoming increasingly active buyers of new construction. This is happening due to favorable lending conditions from banks and low interest rates. For local residents, the bank interest rate is 2.5-3%, and the EURIBOR rate has been negative for more than six months.
The average family income in Riga is approximately 1,500 euros, and such a family can quite afford a loan of 300-500 euros per month for 20-30 years. This is cheaper than renting an apartment.
Another important factor in the growth of apartment prices is that Latvia's banks have practically exhausted their real estate portfolios. Over the last 5 years, banks have actively sold off their properties, which they acquired as a result of the 2008-2009 crisis. 80% of bank properties consisted of new buildings whose owners had taken out loans before the crisis and could not repay them. The prices of such properties were significantly below market value, lower than in developer projects.
To date, bank-affiliated real estate companies have sold off their assets, and there is no longer a new source of cheap apartments.
It was also noted that prices will particularly rise for small apartments up to 50 sq.m, as this is the most sought-after apartment size.
You can view statistics on real estate sales transactions in Riga for 2015 here.
If you are interested in purchasing real estate in Latvia, do not put it off. Over the past year and a half, real estate prices have corrected downward, and their gradual growth has begun.
In the new construction projects that are being designed and starting construction today, price increases of at least 7-10% are planned.
Contact our company, and we will select the best option at the most favorable price that will best meet your expectations.
Have questions? We look forward to your email or call!
Phone number: +371 29774775
Email: info@kominvest.com
Skype: KOM-INVEST