“Latio”: in September, the average price of a standard type apartment grew 1.5%
Riga, October 7th, 2009"Latio"
By market report data of “Latio”, in September, the average price of a standard type apartment in Riga, as compared to August, has grown 1.5%, by 500 EUR/sqm. On the real estate market, price change features a plus for the first time over two and a half years.
Amount of transactions registered with the Land Registry retains the rate of late months. As compared to the active period by 2007, amount of transactions for apartments in Riga builds less than a third part of the historical volume, 500 transactions a month on average. Transactions are concluded in cash predominantly, i.e., without mortgage.
Banks still do not sell properties at such prices as demanded by market.
“Buyers do not believe in stabilization of prices and still take a wait-and-see position anticipating for further decline in prices. It should be emphasized that good objects at market prices have left few in supply, and there does not become more of them. Sellers – in turn – which persistently keep to their price disregarding suggestions of brokers, often lose time but seek for the midway with the buyer eventually to have the deal concluded, or they withdraw their object from supply,” points out Vija Gailite, Head of Apartments and Houses Sales Department “Latio”.
By market report data of “Latio”, in September, prices were invariable in separate segments of standard type apartments, elsewhere they still fell, for the most part - increase was observed, even up to 12% in some areas.
The most significant rise in prices was for one-room and four-room apartments of Series 602 in September. Vija Gailite attributes popularity of Series 602 to the fact that people choose the cheapest ones today, and giving that soviet time blocks of flats are found in the most popular communities Purvciems, Plavnieki, Mezciems, Imanta, thus they are chosen for purchase most often.
A slight price fall still is observed for standard type apartments in the old part of Ziepniekkalns, Bolderaja, Agenskalns. In Purvciems and Plavnieki, one-room apartments in houses of Series 104 and 119 are most unpopular at present whereas price rise of the same series (104 and 119) is observed in Zolitude as simply there are not houses of any other series in Zolitude.
Demand has diminished on rent market. Difference grows between rent charges of renovated and non-renovated apartments. There have become more cases when tenant accumulate big debts of charge for public facilities, has observed Inese Krieva, Head of “Latio” Imanta Office. On these grounds, there exists a trend for rent charges for apartments of different space in similar technical condition to even out more. With heating season approaching, covering of charge for public facilities has become a priority rather than income from rent.
On the market of detached houses, buyers are not interested in private houses with “white” finish and unfinished ones. Also terrace houses are not paid interest to. Attention of buyers is attracted by brand-new, finished houses as it is cheaper to buy rather than to build for oneself, at present.
Interest of foreigners in purchase of apartments has been observed for several months already, yet transactions are finalized seldom. “Investors bide their time currently till situation in politics and economics will become clear in Latvia. As soon as it happens, investors will buy real estate again expecting future capital growth that will be a pressure on price rise,” points out Maris Grinbergs, market analyst of “Latio”.
“Latio” real estate experts stress that prices have become stable on the residential market on the whole, yet the market becoming more complicated, equivocal, an individual and professional approach to transactions is required by assessing each particular segment separately and the supply thereof.
In-depth market analysis can be ordered via phone 67032300, e-mail latio@latio.lv , or at the head office of Latio in Riga, at 11 Raina Boulevard.
