Apart­ment sup­ply in Latvia con­tin­ues de­clin­ing for sixth con­sec­u­tive month

Baltic News Network - - News -

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.

Ieva Čīka/LETA

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