„Latio”: rise in prices on the market of standard type apartments continues in Riga
Riga, November 7th, 2009"Latio"
By data of market report of the real estate company Latio, in November, the average price of standard type apartments in Riga, as compared to October, has increased 3%, thus reaching EUR 530 per sqm. In comparison with November 2008, rate of prices of standard type apartments has decreased 44%;in comparison with November 2007 – it is 63%.
Market analysis by Latio indicates that the average price of standard type apartments has grown 7.5% in total during three months since the lowest mark at EUR 490 per sqm this summer. In November, this price builds 31% of the maximum in spring 2007.
Amount of transactions for apartments registered with the Land Registry has not changed significantly in Riga City during the recent months.
The most significant rise in prices has been observed in Purvciems and Plavnieki, in November. These areas are like indicator of market fluctuations, the first changes usually are observed right in these areas, explains Latio. Price changes are less in Ziepniekkalns, Zolitude, Imanta. A slight decline in prices continues in the areas remote from the centre – in Bolderaja and Vecmilgravis.
In the centre of Riga, price of small-space apartments (up to 50 sqm in average) has grown a bit, while prices of large-space apartments retain the previous rates. In buildings being in a bad technical condition, prices of non-renovated apartments start with EUR 500 per sqm. There is little interest in such houses. In non-renovated houses being in a comparatively good technical condition, the price of renovated apartments ranges between EUR 800 and 900 per sqm. In renovated houses, it starts from EUR 1200 per sqm.
Prices of standard type apartments in Jurmala, Kauguri, range between EUR 360 and 650 per sqm. Prices in Bulduri start from EUR 900 per sqm for standard type apartments and up to EUR 4500 per sqm for apartments in new developments. In Majori, this range fluctuates between EUR 700 and 4500 per sqm, in Dubulti – between EUR 430 and 1800 per sqm.
Supply of apartments ever shrinks. Demand in small-space apartments in good technical condition and at prices corresponding to market exceeds supply. The supply under interest involves dwellings owners of which wish to sell them quickly, therefore they set a price according to the market. Often owners, who plan to leave for permanent residence abroad, offer their estates not only for rent but also for sale.
The small rent market starts becoming stable in Riga city. Rent charge has not changed essentially during the last month. For example, rent transactions are concluded at the amount of LVL 80 a month plus charge for public facilities for one-room and two-room apartments in Imanta. In Agenskalns, rent of two room apartments makes LVL 100 a month.
In Jurmala., Kauguri, apartments are rented out at the rate between LVL 30 and 50 a month depending on condition of the apartment, or it is offered to cover charges for public facilities only, without rent. In the other areas of Jurmala, rent prices of standard type apartments range between LVL 50 and 100, plus charge for public facilities. In new developments- between LVL 200 and 350 a month, plus charge for public facilities.
In November, growth of demand was observed in detached houses ready to live-in both in Greater Riga Area and Jurmala. The greatest interest in estates in Jurmala still is expressed by citizens of Russia. Prices of luxury properties are retained at the previous high level. However, a few transactions are concluded. Buyers offer prices mostly under the market value. Only owners of houses in worse technical condition and location accept prices fixed according to market.
Low activity is retained on the land market.
„If crediting was in sufficient volume, the economically justified price of standard type apartments would be around EUR 700 per sqm now,” holds the view Maris Grinbergs, market analyst of Latio. Maris Grinbergs forecasts that along with renewal of crediting, the price would climb up to EUR 700 per sqm fast;afterwards changes of prices should become slower and should not separate from economic development.
„Clarity in Latvian economics and politics is still awaited for that would enable strategic investors’ decision-making,” notes Maris Grinbergs.
