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Number of deals declines in spite of claims of economic growth in Latvia

Last year, the economic situation in Latvia continued growing rapidly. However, the housing market is ruled be relative silence. Buyers’ activity remained on the level of 2016, whereas the number of real estate deals had declined, as reported by real estate company Balsts.

«Although the economic situation demonstrated growth last year, dynamics of newly-issued mortgage loans are below Lithuania and Estonia nearly by half. The number of real estate deals had declined 1.6% last year, whereas in 2016 the number of real estate deals had increased by 10.5%. The labour market has begun getting hotter. However, economic trends on the labour market are often reflected with a slight delay. Time is needed for residents to become more confident about improvement of the financial situation and consider purchasing a home. We expect average prices to continue growing in 2018. Still, they will not exceed 6-7% annually,» comments Balsts chairman Aigars Zariņš.

Average prices of standard apartments had grown 6.8% at the beginning of 2017. This growth can be explained with a significant decline of apartment offers.

120-130 housing deals a month took place in Riga’s new apartments market that year. Prices of new project apartments in micro-districts range from 1,000 to 1,750 EUR/m2. In Riga’s centre prices range between 1,450-3,800 EUR/m2. Clients, for the most part, are interested about 2-3 bedroom apartments with full finish.

«Secondary housing rent market was also active in Riga last year. People continue travelling from regions in search of jobs and for studies to Riga. Most of the time, these people decide to rent apartments. Demand for quality apartments still exceeds supply. This allows keeping rent rates on the current level. We predict prices will rise 5-7% in 2018,» Balsts notes.


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