Analytics, Latvia, Real Estate

In May 2008, apartment prices in Riga went down 1.2%, reaching EUR 1245 (LVL 875) per square meter, informs LETA.

The average price for one-room apartment in Riga now is EUR 40,000 to EUR 46,000 (LVL 28,000-LVL 32,200), two-room apartment costs an average of EUR 57,000 to EUR 60,000 (LVL 39,900 to LVL 42,000). Outside the city center, prices are the highest for apartments in Purvciems and Plavnieki neighborhoods.

Latio points out that most often it is the price that motivates people to buy apartments in Soviet era block houses instead of apartments in newly built apartment blocks or more expensive offers.

The type and location of the building have become less important factors.

"Housing prices have been continuing to decrease for a whole year, altogether the prices have dropped by more than one fourth, which is a significant fall. There are increasingly many property agents who are ready to offer a better value deal to the clients, because they observe a recession of the market. On the other hand, buyers who have been waiting for a long time and believe that prices have decreased enough are starting to buy properties now, Latio market analyst Maris Grinbergs explains.

Rental rates in Riga have also been falling, as the supply strongly exceeds the demand for apartments for rent.

However, according to Latio's data on real estate deals registered in the Land Register, the number of apartment deals in Riga in April increased 15%.

Still, the increase of market activity in April should not be considered as the beginning of market revival, as the activity has been very low during the previous months. The number of deals in April this year has only reached half of the number of deals last April, and apartment prices continue falling.