The capitals of the Baltic states – Tallinn, Riga and Vilnius – are included in the list of UNESCO World Heritage Sites. Real estate in these cities and in such well-known resorts as Jurmala, Klaipeda or Tartu is in great demand from foreign buyers. And among Russians, buying real estate in Latvia, largely due to the fact that since the middle of 2010, a law came into force here giving foreigners the right to apply for Residence permit in exchange for real estate investments. Since then, about 7,000 foreigners have received a residence permit in the country. However, changes to this program are currently being discussed.
Overview of the real estate markets of Latvia, Lithuania, Estonia
The entry of the Baltic countries into the European Union, which occurred simultaneously in these three countries in 2004, was accompanied by an inevitable jump in housing costs and price increases over several years. From 2005 to 2007, the economies of these countries began to develop rapidly and became one of the fastest growing among the rest of the EU countries.
According to the international agency Knight Frank, in the period from 2004 to 2006, the cost of housing in Riga rose by 140%, and in Tallinn and Vilnius – by 40% and 31% accordingly.
With the onset of the crisis, the decline in the real estate markets of these countries turned out to be significant. The average cost of apartments in Tallinn in June 2009 was about 40% lower than in April 2007, when the market was at its peak. In Latvia, over the same period, apartment prices fell by almost 60% - this is one of the most significant drops among European countries after the crisis. In In Lithuania, the price reduction was about 30%. From 2008 to 2010, the demand for housing in these countries was practically zero. Demand from buyers of real estate, both local and foreign, began to grow again from 2010-2011. Unlike before the crisis, objects are no longer bought here for speculative purposes. According to Eurostat data, real estate prices in the Baltic countries increased by 7.7% over the year in the first quarter of 2013. In October 2013, apartments rose in price over the year in all Baltic states. Thus, according to the Ober Haus company, the largest increase in the average cost of apartments for the year is noted in Tallinn – by 21.4% to 1,337 euros per sq. m. In Riga during this period, the increase was 1.7% to 1,006 euros per sq. m. and in Vilnius – by 1.6% to 1,208 euros per sq. m. Latvia The real estate market in Latvia has suffered more from the crisis than in other Baltic countries. Due to the large number of speculative transactions, a bubble has formed in the Latvian market. Even before the crisis, in the spring of 2007, when restrictions on loans began to apply here, the decline began. 2008-2009 was characterized by stagnation in the Latvian housing market – the number of transactions and offers was extremely low, and this was mainly due to the reluctance of investors to sell properties at unfavorable prices. The Latvian housing market bottomed out in mid-2009 and then began to recover gradually. In 2012, there was a significant increase in the volume of the market and real estate prices in the country. Since 2012, buyers from the CIS countries and China have been particularly active, which is due to the adoption of a law according to which foreign buyers of real estate can apply for a residence permit. In 2012, the market volume growth reached 22.5% compared to last year. Lithuania The Lithuanian real estate market was not affected by the financial crisis of 2008 as much as Latvia or Estonia. According to the Ober Haus company, from December 2007 to 2009, the cost of housing here decreased by about 32%, returning to the level of 2006. The volume of the country's housing market after the 2008 crisis in the country began to grow in 2010. In Lithuania, the number of transactions in 2012 increased by about 6.3% compared to 2011. Despite the price hikes in 2012, there has been a decrease in apartment prices in the country this year, and the lowest decrease was recorded in Vilnius – by 1.9%. At the beginning of 2013, apartments in new buildings in Vilnius cost 850-1550 euros per sq. m. New apartments in Lithuania are usually sold without finishing, while in Latvia and In Estonia, they are sold with a final finish. The cost of real estate in the Old Town and central districts of Vilnius on the secondary market is 950-1800 euros per square meter. m in non-renovated houses, and 1400-3200 euros per sq. m. m – in the reconstructed ones. Houses with finishes in Vilnius cost an average of 145,000-290,000 euros, and in prestigious areas of the city – 240,000-550,000 euros. According to experts, the annual price growth here in 2013-2014 will be about 3-5%. Estonia Apartments in Tallinn account for the lion's share of transactions in the Estonian housing market. The peak of the apartment market in the country's capital was in 2005-2006, when an average of 1,100 transactions were concluded per month. In 2007, the average cost of housing in Tallinn reached its peak, amounting to 1,500 euros per sq. m. Since 2008, the value of real estate began to fall, and the most significant decrease was noted in 2009 – by almost 40%. After the global crisis of 2008 and the subsequent debt crisis in Europe, the number of transactions and prices decreased significantly. However, in 2010, signs of recovery began to appear in the Estonian housing market. And already in the second quarter of 2013, the growth in real estate prices in Estonia, according to Eurostat data, increased by 8.1% compared to the same period in 2012, and in Latvia this figure was 8.8%. Geography of the offer In the Baltic States, the main focus of foreign investors is on the housing markets of the capitals, some also choose apartments or houses in resorts. In Latvia, foreign buyers are most interested in buying apartments and houses in Jurmala, as well as apartments in the capital of the country. In the center of Riga and in the Old Town, the cost per square meter varies on average from 1,500 to 3,800 euros, and in exclusive projects it can reach up to 4,500 -4,800 euros. Foreigners, as a rule, buy apartments with an area of 70-120 sq. m. m worth 145,000-250,000 euros. New apartments outside the city center cost from 1,000 to 1,700 euros per sq. m. On the outskirts of the city, mostly locals buy. In Jurmala, where resort real estate is in high demand among Russians, objects are more expensive – prices on average start from 2000-2200 euros per square meter. m and can reach up to 10,000 euros and above. In new buildings, the average cost per square meter is 3000-3500 euros. In the Lithuanian capital, the Old Town area is in demand among local and foreign home buyers. Apartments here cost an average of 1,800 euros per sq. m. As for resort real estate in Lithuania, foreign buyers choose cities Palanga, Klaipeda, as well as a balneological resort Druskininkai and the territory The Curonian Spit. In Palanga, the average cost of real estate is about 1,200 euros per square meter, and a two-storey house near the Baltic coast, for example, in Klaipeda, will cost about 200,000 euros. In Estonia, foreigners choose the center of Tallinn and its suburb Pirita to buy a home, as well as a fairly prestigious area near Tallinn - Viimsi on the Baltic Sea coast. New apartments in Tallinn now cost 1,800–3,000 euros in the city center and 1,200-1,800 euros on the outskirts. Small towns in the northeastern part of Estonia are in great demand among Russian buyers due to the low cost of secondary housing, as well as proximity to the border with Russia and such large bodies of water as the Gulf of Finland and Lake Peipsi. In addition, about 90% of the population here are Russian–speaking residents. The purchase of such facilities as summer housing is quite affordable for the middle class of residents of Russian megacities. In addition, such a purchase may be interesting for investment purposes. In this region, apartment prices start from 3,000 per apartment (from 60-80 euros per sq. m.) and vary depending on proximity to the sea and transport infrastructure. A house with a plot on the secondary market here costs from 25,000 euros. For comparison, in such famous Estonian resorts as Narva-Jyesuu and Toila, a square meter on the secondary market costs several times more expensive - from 520 euros. HomesOverseas.ru thanks Sergey Gorlach from , Thomas Rixis from the company , Alexandra Efimova from the company, Íàòàëüþ Ôåäîòîâó èç êîìïàíèè çà ïîìîùü â ïîäãîòîâêå ìàòåðèàëà.
