Real estate market in Riga centre has been developing unevenly in the first half year of 2018. The trend of 2017 has been remaining – the number of deals in the new projects in the centre of Riga and real estate has been increased, compared to deals in pre-war and Soviet-era apartment buildings. Also, a stable increase of 3.1% of the average price for apartments in the centre of Riga, particularly in renovated city centre buildings – 3.5% and in new projects – 3.4%. In the first six months of 2018 179 (22%) deals of total 800 deals, were completed for new projects or in buildings, that are in exploitation since 2013, including renovated buildings. The economic growth of this year predict that real estate market will continue to develop as in 2017, and despite the negative factors influencing the market, the estimate price increase is about 7%–8% during the whole year.
The liquidation process of ABLV Bank should be considered as a negative factor affecting the market, resulting in a significant impact on the operation of all credit institutions operating in Latvia and affecting the trust of clients, as well as several real estate development projects were suspended in the city centre funded by ABLV Bank. Attitude from most of foreign investors towards Latvia had changed rapidly and several large investment and development projects were stopped. Several foreign investors ceased to invest funds in current projects and they are currently being put in market.
Taking into account that more and more apartment buildings in the city of Riga are being renovated and the quality of housing fund is improving, there has been observed buyer’s interest to buy apartment in the central part of the city. While choosing a real estate, clients pay attention to property rights of land, technical condition of the building, infrastructure of the environment, as well as residential area utilities – lift, car park, warehouses, improved back yard. However, less attention to the location of the building. Demand of well-planned apartments in Riga city centre from private investors is continuing to grow, which are then offered for short term or long term rent.
