Prices
In Riga, the capital of the country, in July 2024, apartment prices fell by 3.96% year-on-year to 848 euros per square meter, according to Arco Real Estate.This was the nineteenth consecutive month of year-on-year price declines.Data from the Central Statistical Bureau for the 1st quarter of 2024, on the contrary, showed that house prices in the country increased by a modest 3.66% (2.72% in real terms) year-on-year after an increase of 0.82% in the 4th quarter of 2023, by 3.02% in the 3rd in the first quarter, by 5.38% in the 2nd quarter and by 5.87% in the 1st quarter.
By type of real estate:
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Prices for new buildings in January and March rose by 11.06% (10.05% in real terms) compared to the same period in 2023.
- Prices for ready-made housing increased by 1.24% (0.33% in real terms) over the same period.
Sales
After falling over the past two years, housing demand has shown some improvement in the first half of 2024.
In Riga, the total number of transactions in the primary market increased by 2% in the first half of the year compared to the second half of 2023 and by 7% compared to the same period last year, according to Arco Real Estate.
In 2022-2023, demand declined, as many buyers could not afford to take out loans due to a sharp increase in interest rates and a decrease in purchasing power amid high inflation.In Riga, the total number of transactions for the purchase and sale of new apartments in 2023 decreased by 6% year-on-year, and in 2022 by 4%, according to Ober Haus.
"A decrease in market activity was recorded in all market segments," this affects both low-cost housing with low energy efficiency in Soviet serial buildings, and the more expensive market for new buildings," Ober Haus noted.The number of bookings in newly built residential projects is also lower than usual.Buyers are in no hurry to book apartments under construction, preferring to wait until the project is completed.
Transactions with foreigners
Foreigners, who have supported the market in recent years, used to account for about 70% of all real estate transactions in the country annually.Latvia attracts them partly because it has some of the lowest housing prices in Europe.In addition, foreigners receive a five-year residence permit in Latvia if they buy a property of a certain value.
Foreigners prefer to buy apartments and houses in Riga and Jurmala.According to Aigars Smits, Chairman of the Board of Directors of Arco Real Estate, for a long time Russians have been the largest investors in residential real estate in Latvia, followed by Ukrainians, Chinese, Kazakhstanis and Uzbeks.
It should be noted that since 2022, Russians and Belarusians cannot participate in the program href="//www.homesoverseas.ru/news/Chislo_zajavitelej_na_Zolotuju_vizu_Latvii_umenshilos_bolee_chem_vdvoe " target="_blank">investment residence permit Latvia. In addition, the country has ban on entry of citizens of the Russian Federation who do not have a residence permit of the European Union for tourist purposes. Demand for apartments and houses from Russian buyers has already fallen, but the Latvian government is considering the introduction of a complete ban on the sale of real estate to Russians.
Rent
According to a study conducted by the Global Property Guide, the profitability of renting apartments in Latvia can range from 4.15% to 11.68%, depending on the region.
In Riga, the average yield on apartment rentals in the 2nd quarter of 2024 was 8.47%, in Jurmala, an average of 7.66%.
Source: Global Property Guide
