Latio: In January, large-space apartments sustain increase in the average apartments price

Riga, 4 February 2010
Latio

According to the market research data of the real estate company Latio, in January the average commercial apartment price in average condition in Riga was 550 EUR/sq.m, which is 2% more than in the previous month (538 EUR/sq.m). The major increase in prices in January concerns three and four-room apartments.

In January there are still insufficient offers on apartments in housing estates. The major interest in relation to the offers and the corresponding increase in prices in January has been observed in the most sought after commercial project for three and four-room apartments in Imanta, Vecmilgravis, Kengarags and Agenskalns. In its turn in Zolitude and Ziepniekkalns the significant increase in price has been observed for 119 series apartment. In general the prices in recent months can be characterized as fluctuating.
According to Latio apartment and private house production department manager Vija Gailīte, intense interest in apartments with larger areas can be explained by the lack of offers on two-room apartments and the insignificant price difference between two-room and three-room apartments. A year ago the price difference between two-room and three-room commercial apartments was 10 000 EUR on average, while at present it has halved to 5 000 EUR on average.
A huge jump in the offers on apartments in January has been observed in the centre of Riga. Buyers are interested in apartments in good houses. Besides, foreigners still keep expressing their interest, though deals are not being closed, since the offers are significantly lower than the selling price.

The number of deals in recent months has remained consistent. This January buyers have expressed greater interest than in other years, which can be explained by the determination to purchase new dwellings or make changes in this area in the New Year.

Growing interest is expressed by the people who have to purchase another apartment after selling their old one, points out Latio Imanta department manager Inese Krieva. Owners who own a second dwelling outright, as well as property received as legacy are more often offered for sale than for rent.

The largest number of offers in new projects is in the price range 1000 to 1300 EUR/sq.m. On the market dwellings in new projects change hands often, which creates competition with new projects. Insignificant demand for apartments in this sector is observed in the price category up to 900 EUR/sq.m.

Interest for land is still low. According to Latio market analyst Māris Grīnbergs, at present the land is bought as an investment object for further years without any construction. It is currently more profitable to buy a finished private house than to build it. Meanwhile the number of deals with private houses has not increased, though the interest of buyers has been increasing.

With the introduction of new tax system the parties face many uncertainties. January has begun with consultations on the tax system in the area of real estate.