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Market report about situation on October 2015



APARTMENT PRICE INCREASE WILL NOT EXCEED 3.5%

„Real estate market development continues to stagnate due to low solvency on the demand side and weak economic activity. The current demographical situation and the lack of potential buyers in a sufficiently strong position financially is an aspect which lowers hope for increases in price for apartments in the standard-type segment. If we look at the situation in Riga we predict only minimal price increases for the immediate future, not exceeding 3.5% per year. Even this growth is possible only if the economy will develop normally and potential buyers will have access to funding”, comments the CEO of company BALSTS Aigars Zarins.

 

In October average apartment prices increased by 0.38%. This month the BALSTS index increased by one point and reached 155 points. There were apartment price increases from 0.13 -0.90% in most of the secondary market, as well as in the center. A minimal price decrease was observed only in Vecmilgravis – 0.19%. The number of transactions compared to September increased by 1 %. In the 3rd quarter of 2015 almost 90% of of sales were to local buyers.

  The current market situation shows a shortage of apartments on offer within 119th and 104th series buildings in the price range from 750 – 800 EUR/m2. The average price for standard-type apartments at the most expensive and the cheapest suburbs of Riga - Teika and Vecmilgravis, has a price difference of more than 35%. Such a price difference also applies depending on the building series. Average square meter price for 119th and 104th series buildings is about 40-50% higher than in the Khrushchev-time buildings square meter price. For example, 2-bedroom apartaments in 119th and 104th series buildings are offered starting from 38 000 EUR, but in much older Khrushchev-time buildings starting from 25 000 EUR.

The rental market in the 2nd quarter of 2015 still remains active. Demand for rental apartments in the center of Riga still exceeds supply. This allows the rental rate to hold at the current level and even increase slightly at 5 -10%. Now it will become profitable to invest money in purchasing an apartment in the secondary market in order to rent it – „buy-for-rent”.

With regard to Riga office space, A class space is being offered for tenancy at 10 -15 euros per square meter, and in the most prestigious buildings up to 16-20 euros per month. Class B space is on offer at 5-10 euros per square meter per month, before service charges.

 

 

Plašāku informāciju iegūsiet:

BALSTS, Lāčplēša iela 41,

Tālr.: + 371 67076191

Fax: + 371 67076199

info@balsts.lv, www.balsts.lv

  

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