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Market report about situation on November 2011


BALSTS INDEX REMAINS UNCHANGED = 125 

Crisis of “Latvijas Krājbanka” has not affected BALSTS index, in December it is 125. In the next few months we expect a positive index change, which could be contributed by the Chinese people interest of Latvian real estate, as well as the expected growth of Finnish investors' interest.

"The crisis of “Latvijas Krājbanka” has caused two different opinions about the real estate market's future development. Home owners are confident that prices will remain stable or even will rise because real estate is the best and safest way where invest free funds. Perhaps a large part of the customers of “Latvijas Krājbanka”, receiving compensations, for some time will not trust banks, and people interest about investment opportunities will increase. In the same time the potential buyers would like to think that real estate prices will fall, they expect further decline in prices, followed by a relatively long period of stagnation. As a result of this difference of opinions is minimal fluctuations  of real estate prices – prices of standard type apartments have minimal fall, on average 1%, while the prices in the center and in the new projects, which are the best opportunities for investment, have risen slightly – on average of 1.5%. Gathering all the information and studying the market, we expect that the price decline will not happen and the market will continue to recover, "the situation on the market commented Aigars Zarins.

 

"Now in the real estate market can be observed a positive trend which in the next few months could affect housing prices. One of them is the sudden interest shown by Chinese people on the housing purchase in Latvia. If until in the residence permit settlement was interested mainly people from Russia and other former Soviet republics, now them  joined China, from which last month Latvia received 46 requests for residence permit. The reason for this is the opportunity to pave their way to the European Union, as well as the relatively low real estate prices and the ability to easily complete all formalities.

 

Another country from which in the near future we expect an increased interest is Finland. Latvian real estate prices are now relatively low, it is a great investment opportunity for economically stable and developed countries. Finland real estate prices in recent years go up, but the situation in Europe is worrying the Finnish people, it could be possible that prices in Finland may fall. Therefore, the Finns started to take an interest in investment opportunities in Latvia. Latvia, from the Finnish point of view have a good geographical location, and the Finnish people are interested in business development opportunities here. In the next year this event could lead to positive changes in prices and the housing segment, as well as in the commercial segment, "forecasts the CEO of company BALSTS Aigars Zarins.
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