Real estate in Latvia: freezing in six months

March 10, 2015

Real estate in Latvia: freezing in six months

"Stagnation and wait-and-see behavior are predicted in the first half of 2015. And now there is a stagnation on property market in Latvia", the chairman of BALSTS Aigars Zariņš said. The reasons are "a tense geopolitical situation, a prolonged uncertainty with the residence permit program, changes in the laws, and a principle of the hand over keys." According to Zariņš, the positive trends will begin in late 2015, when housing prices in Latvia might soar by 3-5%.

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Experts predict that the first mortgage payment increase may affect the rental rates (by 5-10%) and real estate prices (in the range of €30,000 – €120,000). Furthermore, the commercial space worth may grow by 5-10% due to the lack of quality facilities, ee24.com informs.

After the amendments on residence permit in Latvia entered into force on 1 September 2014, the demand of the Russians on Latvian property has been reduced. In the autumn of 2014 the main interest has been shown by the Latvians (98% of all transactions), they asked property up to €120,000. A profitable investment in recent years was the purchase of secondary housing for subsequent leasing.

Fact. According to the Latvian Land Registry data, 48,293 property sales were concluded in Latvia in 2014 (+1.1% y-o-y), including in Riga – 14,070 sales (+1.5%). It's the highest data since the peak period of 2007.