Real estate becoming more affordable both in commercial and residential lease markets
Riga, March 12th, 2009
Information presented by Latio
The real estate market is presenting a growing choice both for lease of a dwelling and for commercial premises at rent prices similar to those of approximately 10 years ago.
There is some confusion and concern in the society about the strikingly large number of empty store premises in the centre of Riga. This is an opportune time for entrepreneurial people to try their hand at retail;owners of retail premises are understanding and welcoming.
Real estate valuators are receiving orders from lessees of large premises to carry out assessments of the rental fees specified in their lease agreements and compare them with the price level dictated by the current market conditions.
The number of residential lease agreements has exceeded the number of purchases. Sales agents become to rent consultants. Experts predict long-term development of the lease market. ‘’By borrowing to purchase a dwelling, a person is leasing capital from a credit institution. Instead, it is possible to lease the dwelling directly. A lease agreement can be terminated at any time, unlike the obligations of mortgage,’’ points out Latio market analyst Māris Grīnbergs.
In city districts, the average rental for one-bedroom project apartments is 110 LVL, for two-bedroom apartments – 120 LVL, and for three-bedroom apartments – 130 LVL.
‘’In February we observed three tendencies. There is a growing proportion of buyers with cash resources. There is activity on the part of buyers that have received a grant from Riga City Council for purchase of a dwelling. Potential buyers, even after having received loan approval for purchase of a home, still make the decision in favour of a lease after getting acquainted with the credit institution’s terms,’’ notes Vija Gailīte, head of the ‘’Latio’’ apartment and private house sales department.
In February, the number of properties offered for sale continued to fall. The properties that are currently being offered in the market are generally free of credit liabilities, or with credit liabilities that do not exceed the current value of the property. The number of foreclosures is increasing.
In accordance with the Latio market report, in February the average price of project apartments in Riga has fallen by 15%, reaching 695 EUR / sq. m. Compared to February last year, the price has fallen by 48%.
