Latio: Supply of apartments reached the highest level
July 6, 2010
Riga
The supply of apartments in Riga reached the highest level this year in June, and the offered prices go up as well. However buyers are not ready to accept higher prices so deals are made at prices of previous periods. According to the data of Latio market report, the price of standard type apartments in the capital did not change considerably as well.
In June supply of apartments increased reaching the highest level this year. As well as the tendency of increase in prices of real estate just offered for sale also exists. Partly apartments for sale do not satisfy the customers’ requirements due to their high prices or low quality. Comparing to supply of apartments in May prices in all categories have raised.
“Many sellers who did not offer apartments they own for sale before regarding the tendency of stable price growth during the previous months decided to offer their housings for sale, moreover, at the price higher than average market price. The interest of potential buyers in such apartments is low, and deals are made at prices of previous periods,” explains Latio Market Analyst Māris Grīnbergs.
Buyers show more interest in apartments offered for prices lower than average. If the previously established price at the average level is decreased by 5 to 10% the potential buyers become much more interested in such offer. Currently, price is the most important criterion for a buyer, while other aspects depend on it.
The average price of standard type apartments in Riga did changed considerably comparing to previous month and was 576 EUR/m2. The average price of standard type apartments in May was 575 EUR/m2. Each previous month the price of standard apartments grew by 1%. During the year the average price increased by 17.3%, in June, 2009 it was 491 EUR/m2. Last spring, prices of apartments continued decreasing, yet those became stable in summer.
During the previous ten months the average price of standard type apartments increased by 15.2%. In September 2009 after two-year long fall the average price of apartments increased again reaching the level of 500 EUR/m2.
In June the number of buyers of various houses, who used or were ready to use bank credits, was growing. As well as the share of transactions made with the help of credit in the total amount of transactions also increased.
“The changes in credit portfolio in June were not negative. This means that the banks give as much money in the form of credit to households as they receive from them. Approximately 80% of resources loaned to households are mortgages. Certainly this statistics include loan restructuring as well, anyway the trend is positive and it is very likely that the curve of changes in credit portfolio will rise above zero level in the future” explains M.Grīnbergs.
Prices of standard type apartments in good technical condition in such favourite boroughs like Purvciems, Plavnieki, Zolitude, Imanta and Ziepniekkalns in June were the following: EUR 21,000 to 31,000 for one-room apartment, EUR 28,000 to 37,000 for two-room apartment, EUR 35 000 to 47 000 for three-room apartment, EUR 39 000 to 57 000 for four-room apartment. Prices of the apartments are about 20% lower in the boroughs remote from the centre of Riga, for example, Vecmilgravis and Bolderaja.
Demand for standard type apartments and activity of buyers in June stayed on the level of previous two months;however the demand was higher than during the first months of the year. As before buyers are more interested in good and high-quality ready-to-live apartments.
