Latio: Prices for standard type apartments have increased by 18.4% in the course of the year, July marked by low increase
5 August 2010
According to Latio market research data, the average price for standard type apartments in Riga in July was 579 euros per square metre, and in the course of the year it has increased by 18.4%.
In comparison with the previous month, changes in the average price are not significant, i.e. the price has increased by three euros. June was also marked by low increase in the price for typical housing. “The current situation on the housing market can be characterized as stubbornness of both sellers and buyers. However it cannot be called as bargaining. Owing to a sufficiently stable increase in prices in the previous months coupled with the promises of banks to provide financing for property purchase, sellers do not agree to reduce prices for offers even in cases, when the buyers’ interest to the specific property is too low. Buyers, in their turn, are not ready to pay higher prices than in the previous months,” describes Vija Gailīte, head of Latio sales department for apartments and houses.
In the course of the year the average price for serial apartments in Riga has increased by 18.4% – in July 2009 it was 489 euros per square metre. Earlier in spring the prices for apartments continued to decrease, reaching the lowest point in summer months. The rise of average prices for serial apartments began in September 2009, reaching the point of 500 euros per square metre.
In July, similarly to several previous months, the demand for serial apartments was higher than at the beginning of the year;however, the buying activity in various residential districts of Riga was different. Traditionally, the demand in July was influenced by the summer and holiday season. Major buying interest was shown in good and quality serial apartments ready for immediate living for prices corresponding to financial capacity of the buyers. Since such apartments form only a part from the total offer, potential buyers spend up to several months searching for suitable apartment. There are cases when this process lasts even for a year.
The offer of apartments in Riga in July remained on the level of the previous month. There are apartment owners who plan to sell their property, but leave it for autumn, hoping for greater buying activity, as well as higher prices. A part of offered apartments, due to bad conditions or high prices, still does not meet the demand of buyers.
The volume of deals with housing in this year by months is fluctuating, while in general it remains on the average level of the previous year. In the second quarter, as compared with the first three months of the year, the volume of deals with housing in Latvia increased by 6.2%. Approximately 80% from the total volume of deals with housing in the first half of the year are formed by the deals with apartments. Deals with new project apartments, similarly to the period of more than two previous years, in Riga exceeds 20% from the total volume of deals.
In July the prices for standard type apartments in the residential districts of the capital in houses of various series were different. The stability of prices or a slight increase (1-3%) was noticed in the houses of all series in Purvciems, Pļavnieki, Mežciems, Jugla, Ķengarags and Vecmīlgrāvis, while in other residential districts, alongside with the stability or increase in prices for several types of apartment, a slight decrease (1-2%) in the average price was observed.
Prices for serial housing in good technical condition in such residential districts as Purvciems, Pļavnieki, Zolitūde, Imanta and Ziepniekkalns in July for studio apartment was 21 000–31 000 euros, for two-room apartment – 28 000–38 000 euros, for three-room apartment – 34 000–47 000 euros, for four-room apartment – 40 000–52 000 euros. In the most remote districts of Riga, for instance, Vecmīlgrāvis and Bolderāja, prices for apartments are lower for 20% on average.
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