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Market report about situation on December 2014



MARKET RECOVERY IS EXPECTED IN THE SECOND HALF OF THE YEAR WITH 3-5% PRICE INCREASE

The highest average apartment sq.m. price increases in Riga suburbs since the beginning of 2014 were observed at Kengarags (7.2%) and Imanta (7.4%). In the other largest Riga suburbs prices also rose in annual level. These increases can be explained by a significant reduction in properties on offer at lower price levels, and the remaining offer price increase.

 

In the autumn of 2014, 98% of real estate transactions were made by local consumers. Local buyers are interested in the purchase of new flats in the price range up to 120 000 euro. If in 2015 there will be more limited lending from banks and and larger deposit requirements imposed, this will certainly affect the real estate prices. The most affected will be secondary market apartments and new projects at the price range from 30 000 to 120 000 euro.

  Bad credit conditions will also affect the rental market, because those who are unable to buy a property, will want to rent it. This year rental rates will increase at 5-10%. Now it will become profitable to invest money in purchasing an apartment in the secondary market in order to rent it.

"In this year of 2015 stagnation and temporizing position are predicted till the end of the 1st half. There is an impact on the market from many factors which lead to uncertainty - the uneasy geopolitical situation, the lingering uncertainty about the temporary residence permits, changes in the Insolvency Law and "dropped-off key principle." This has slowed down an incipient growth trend which manifested in the past year. We are optimists, but it is clear that significant growth is not expected. Market recovery is expected in the second half of the year with 3-5% price increase" comments the CEO of company BALSTS Aigars Zarins.

At 2015 rental rates for commercial properties may increase by 5 – 10% based on the decline in availability of modern office space. New commercial building projects are not expected, as developers are reluctant to start construction without the security of significant long-term prelease agreements. As well as developers cautious make government decisions, the impact of which will be clarified only in the next 6 months.

In December 2014 apartment price increases were observed of 0.31 – 1.01% in Jugla, Kengarags, Zolitude and as well in new projects. A minimal price drop from 0.46-0.76% was observed in most of secondary market. This month the BALSTS index remains unchanged at 147 points.

 

 

 

Plašāku informāciju iegūsiet:

BALSTS, Lāčplēša iela 41,

Tālr.: + 371 67076191

Fax: + 371 67076199

info@balsts.lv, www.balsts.lv

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