Latvia, Real Estate

Office space market

The number of offers in the office space market kept increasing in the second quarter of 2009, and the prices kept falling. However, the prices are not decreasing as fast as they used to in the first quarter, the report states, informs LETA.

Most often it is companies that wish to cut spending on office space rent as well as enterprises that are being restructured that look for new office space to rent. Even though offices with under 150 square meters in area are demanded the most, interest in larger offices has also been increasing.

Interest in offices and office buildings up for sale has also increased slightly, compared to 2008 and the first quarter of this year.

However, these trends are very weak and it is hard to say how the office space market will develop later on this year.

The commercial space market was heavily affected by the shrinking retail trade volumes in the second quarter. There are comparatively many commercial space offers in both Riga's Old Town and on the most popular shopping streets in Riga (Terbatas Street, Barona Street). As the prices for commercial space keep falling, there are more prospective tenants on the market.

The activity on the industrial space market was lower than on the office and commercial space markets in the second quarter, and potential investors' activity was very low, the report informs, adding that investors are waiting for the economic situation in Latvia to stabilize.

Apartment prices

The price of Soviet-era apartment in Riga have begun to stabilize, and it is predicted that prices will not drop as rapidly as they did at the beginning of the year.

As the Ober Haus's experts point out, the fall in apartment prices has decreased in the second quarter of this year. If in the first quarter of this year apartment prices fell by 29.3 percent, in the second quarter of this year apartment prices fell by only 8.8 percent. The average price of a Soviet-era apartment in Riga was EUR 763 per square meter in the first quarter of the year, but in the second quarter of the year – EUR 478 per square meter.

The price of apartments in Soviet-era buildings in the second quarter of this year was 37 percent lower than in the first quarter of the year, and 47 percent lower when compared to the beginning of the year.

The price of Soviet-era apartment in mid-June fell to EUR 460 per square meter, and this is only 1.1 percent less when compared to May. This shows that prices are beginning to stabilize and prices will not drop as rapidly as before, Ober Haus points out.