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Turnaround in Latvian capital

February 02, 2012

In 2011 the Latvian real estate company BALSTS observed a significant drop in prices (-7.3%) in standard-type apartments in the capital of Riga. The same group has now noted a complete turnaround with new projects in the city center increasing by 7.69%. While the group is not forecasting a complete market turnaround, it has forecast an increase in prices and activity in the center of Riga.

The uptick in prices and activity is seen as a result of investors' growing interest in this market segment. According to BALSTS, the largest demand in Latvian real estate market is from foreigners, mostly residents of the former CIS countries. Such properties are a good investment opportunity as they can successfully be rented at a time where the rental market lacks quality apartments and demand considerably exceeds supply.

In contrast, in Jūrmala, a popular resort community 25 kilometers west of Riga, prices are predicted to remain flat due to an over inflation of prices which do not reflect the real market situation. Eastern investors, who are well informed about the economic situation in the Latvia, are unwilling to overpay for real estate and are more likely to look towards the center of Riga for investment opportunities.

The Latvian market and professionals is represented at WorldProperties.com by the Latvian Real Estate Association (LANĪDA), a group founded in 1994. Read a related November 2011 WorldProperties.com news item on this topic.

ICREA