"Latio": the average apartment price in Riga has increased by 1.5% in December
Riga, January 7th, 2010
"Latio"
According to the data of Latio’s market report, the average apartment price in Riga last December, compared to November, has increased by 1.5%, reaching 538 EUR/sq. m. The apartment price has increased by a total of 9% from the lowest point in the summer of 2009.
The largest price increase in December has been observed for small-sized one- and two-bedroom apartments, particularly in the districts of Āgenskalns, Zolitūde, Ziepniekkalns, Vecmīlgrāvis and Bolderāja.
In December, apartment prices in districts of Riga closer to the center, such as Purvciems, Pļavnieki, Zolitūde and Imanta, for one-bedroom apartments are between 18,000 and 27,000 EUR, depending on the type, storey, condition and layout. The prices of two-bedroom apartments are at the level of 25,000–34,000 EUR. Three-bedroom apartments cost 30,000–44,000 EUR. In city districts further away from the centre, such as Bolderāja and Vecmīlgrāvis, the prices range from 14,000 to 19,000 EUR for single-bedroom apartments, 19,000–26,000 EUR for two-bedroom apartments, and 23,000–35,000 EUR for three-bedroom apartments.
Demand in the segment of new projects in outer city districts and the outer centre is at the level of 900 EUR/sq. m. for fully-finished apartments, while offer remains at an average level of 1200 EUR/sq. m.
The number of transactions in the last months of the year has not considerably changed. Due to the interest of potential buyers in small-sized apartments, the offer of cheaper apartments is constantly decreasing, while the offer of more expensive apartments is slightly increasing.
Purchases of real estate are still mainly made without credits, in cash. Buyers are taking out their bank deposits and choosing to invest in real estate. The motivation of buyers varies – apartments are purchased both as small investment objects with a hope future increase in value, and for own use.
Considering the increased state tax from 2010, in December, more than other years, people were attempting to complete registration of property documents in the Land Register. Many have lost trust in government decisions, so owners are carefully assessing any housing-related tax payments, notes Rita Šulmeistere, head of Latio Purvciems department.
In the last few months, the rate of the fall of rental costs has slowed. In December 2009, the average rental price index had fallen by 60%, compared to December 2008. The total decline of rental prices from their highest point in November 2007 is 70%.
“In the sense of prices in the rental market, larger-sized rental apartments in the new project buildings of city districts are competing with private houses in Riga district. Potential tenants are looking for good private houses priced at 300 to 500 LVL per month,” points out Inese Krieva, head of Latio Imanta department. Overall, the rental of apartments remains at the previous month’s level. In outer city districts, apartment prices are at an average level of 80–100 LVL per month, not including utilities.
