Latio: Average price of standard type apartments to grow 1% in May, 15% – in nine months
June 2nd, 2010
Riga
In Riga, the average price of a standard type apartment has grown 1% in May as compared to April, and it was 575 euros per square metre, indicate data of Latio Market Report.
In April, the average price of standard type apartments was 568 euros per square metre and also grew 1% as opposed to March. The average price of standard type apartments has grown 11% over a year – it was 518 euros per square metre in May 2009. Last spring, prices of apartments continued decreasing, yet those became stable in summer.
The average price of standard type apartments has increased 15% over the recent 9 months. In September 2009, the average price of apartments built in Soviet times grew again following the decline lasting for two years, and it was 500 euros per square metre.
In May, number of buyers willing to use bank loans in property purchase grew in all segments of housing. The bulk of transactions, however, are still completed without lending.
“Despite crediting having been resumed by commercial banks, volumes of granted loans were not yet remarkable. Credit portfolio changes are still negative – banks receive from households more than they grant in loans. With crediting growing, also increase in prices of apartments should be expected as dwellings are bought with the help of loans in normal economic situation,” assesses Maris Grinbergs, Latio Market Analyst.
In May, quite a steady and stable growth of prices of standard type apartments was retained (1–2%, even higher in particular cases) in all boroughs of the capital city and for all series of the multi-residential houses. A slight decline in the average price was observed for apartments of Series 602 and Series 119 in Imanta and Zolitude, in May.
Prices of standard type apartments in good technical condition in such favourite boroughs like Purvciems, Plavnieki and Zolitude in May were the following: 1-room apartments – EUR 22,000 to 30,000;2-room apartments – EUR 30,000 to 38,000, 3-room apartments - EUR 35,000 to 47,000, 4-room apartments – EUR 39,000 to 54,000. Prices of the apartments are about 20% lower in the boroughs remote from the centre of Riga, for example, Vecmilgravis and Bolderaja.
“In May, demand in apartments was retained on the level of April when higher activity of buyers was observed in comparison with the previous months. Many of those who are interested still expect a discount of selling price of dwellings, whereas the sellers do not agree thereto and do not reduce the prices more often. Since price of apartment is the crucial criterion for the bulk of buyers, transactions are not completed most often and other property is sought for in cases when it was not possible to agree on a discount,” points out Vija Gailite, Head of Latio Sales Department for Apartments and Houses.
In considering purchase of a dwelling, availability of public transport becomes ever more significant a criterion beside quality of the dwelling. If a stop is found far from the subject apartment or house, buyers often abandon the idea of acquiring such a property.
In May, supply of apartments was slightly smaller than in April, meanwhile it exceeded rates of last year. In the beginning of 2010, supply of apartments decreased slightly, but it grew in the following months, and it is larger this year than the average level of last year, in general. Though the supply features a growing trend, a part of these apartments still do not meet demand of the buyers due to bad condition or high price thereof.
In comparison with April, supply of apartments has grown for the price ranging between EUR 10,000 and 45,000 in May, while supply of apartments has decreased for the price ranging between EUR 70,000 and 100,000. For the Category Two, apartments in downtown buildings and new projects dominate.
