Colliers Latvia has conducted a study on residential market trends in Riga. The study concluded that most activity during last year was observed in the market of old apartments, although the newly built apartments’ market also remained active.
The total sales in residential sector have kept the same level as in 2017, but the number of transactions has decreased by 8%, which can be explained by the increasing prices in the sector. Approx. 80% of apartment transactions has been observed at a level below EUR 75 000, which indicates a significant activity in the old apartments market. About 15% of apartments with a transaction value of over € 75,000 has been acquired by non-residents.
‘Statistics for 2018 confirm that the residential market in Riga remains active and this trend will continue in 2019. There are several reasons for it: the increase of average net wage, which fuels the purchasing power of the Latvian population and the future optimism, the wide supply of new apartments in the market, especially in the economy class apartments and favourable bank conditions for mortgage lending, including the state guarantee by Altum. Compared to the neighbouring capital cities, real estate is the most accessible in Riga, so we might see the new real estate developers, which see the growth potential here, entering our market,’- comments Colliers International partner Ēriks Bergmans
Approx. 20% of the total number of apartment transactions in Riga has been concluded for the apartments located in new or renovated buildings. In general these transactions make around 40% of the total value of apartment transactions, including those built or renovated after 2000.
In 2018, the number of transactions with the newly built apartments has slightly decreased (-6%) which could be explained by the currently limited offer in this segment and that several large projects that were commissioned at the end of the year but the sales transactions registered in the Land Register only in the beginning of 2019.
The study concludes that the average selling price for new apartments has increased by 6% (excluding warehouse space and parking costs) in 2018 and reached EUR 106,000, while the average price per square metre has reached EUR 1700. Despite the average price increase, the market for new apartments remains active. Currently, a significant number of projects with a total planned number of apartments of about 2,000 are under construction or full reconstruction. About 35% of the apartments under construction have reservation contracts.