"Latio": Lack of high-quality apartments in the rental market
03 March 2010
The rental market is currently experiencing a lack of high-quality apartments in all districts of Riga, including the city centre, at prices corresponding to the market conditions – an average of 4.5–6.5 EUR/sq. m. in the outer city districts and 5.5–8 EUR/sq. m. in the centre, depending on the quality and location, points out Ģirts Krūmiņš, head of Latio rental department.
In February, the prices of apartments in average condition in districts of Riga have not significantly changed. A very slight trend of price increase has been observed, possibly connected with a temporary decline in the offer of such apartments. According to Latio market report data, the average rental price of apartments in February was 2.5 EUR/sq. m.*;
in January it was 2.2 EUR/sq.m.
The offer of individual rooms available for rent has increased, due to optimization of utility payments. The landlord lives in one room and rents out the other, thus reducing the expenses of both parties. However, it cannot be said that demand for this type of apartments is large.
There is still demand for good apartments in new buildings in Pārdaugava, including Ziepniekkalns, Torņakalns, Pleskodāle and Āgenskalns.
High-quality, exclusive apartments are still in demand, as well. Their prices range from 1500 to 3000 EUR. A price per sq. m. cannot be determined for these apartments, as the size, location and furnishing varies widely. The offer of truly high-quality exclusive apartments is insufficient.
Rent of apartments in new buildings is attracting the interest of potential buyers, as well. Buyers that wish to improve their living conditions but cannot afford the first installment for the purchase of an apartment look for an opportunity to rent one instead. In this way, the payments during the first years make up the first installment. The buyer can use this time to test the quality of the purchase by living in it. Although there are not many such cases in practice, interest on the part of buyers/tenants has increased.
Private houses are currently being offered for rent at a price of 500 to 1,500 EUR per month, mainly depending on the size, finishing and location of the house. The rental price of a high-quality private house can reach up to 3000 EUR per month.
In Sigulda, the rental price of houses is 280–430 EUR per month. There is little activity in the rental market in Sigulda;the offer is low, and three- and four-bedroom apartments are not in demand at all, notes Alla Laurena, head of Latio Sigulda branch.
The fall of rental prices in the apartment market began half a year later than the decline of sale prices in 2007. Today, the average rental prices of apartments in Riga are similar to those at the end of 2003.
* The rental price index is calculated as an average of all apartments in all districts with various numbers of rooms.
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