Apartment supply in Latvia continues declining for sixth consecutive month
The average prices of standard apartments in October had slowed down the growth rate. The number of apartment purchase offers also continues to decline for the sixth consecutive month. Potential buyers show a great deal of interest. However, decisions are made slowly and cautiously, as reported by real estate company Balsts. «Price rise has declined from +1.5% in April to +0.1% in October. Since the beginning of 2017, average prices have grown by more than 6%. This is the index we had expected to see only at the end of 2017. Decline of offers will continue stimulating price growth. Still, it is too soon to speak of a bubble, because the price of standard apartments is 52.7% below their historic peak,» comments Balsts chairman Aigars Zariņš.
In October, apartment offers in micro-districts, compared with the previous month, declined 2%. The number of offers continued to decline for the sixth consecutive month. It has been observed that the smallest number of offers in found in locations with the lowest prices – Bolderaja and Vecmilgravis. This means apartment owners are not in a hurry to sell their property for low prices. Instead they are waiting for price growth.
In October 2017, apartment price index reached 766 EUR/m2. The highest standard apartment price index is in Teika – 895 EUR/m2, whereas the lowest is in Bolderaja – 541 EUR/m2. Apartment price decline in Riga has been noticed only for new project buildings. Minimal growth – 0.12-0.25% – has been noticed in most of Riga’s micro-districts, centre and new projects. Balsts index has grown by 1 point – to 179.
«In the new project apartment segment, which focuses on local buyers, activity remains on the level of previous months. Mortgage loan offers have become more attractive under current level of activity and lower monthly mortgage payments. We have also noticed that people are rather cautious when it comes to purchasing a home and investing finances into it,» the company explains. Housing rent market remains very active. Demand for apartments in Riga’s centre still exceeds supply. This helps keep rent rates on the current level or increase them slightly.
Apartments in the city centre are offered for 5-8 EUR/m2. If an apartment is located in the historic centre and has quality finish, its price goes up to 10-13 EUR/m2.