baltic states and belarus real estate market review - Colliers

Real Estate Market Review 2011 | Latvia Residential Market
Upscale Residential Market Highlights
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As of July 1, 2010, Latvia has passed a new regulation providing additional opportunities for
foreigners to obtain a temporary residence permit in Latvia without the need to reside in the
country for a specific period of time.
According to the newly adopted provision, one way a foreign natural person may obtain a
temporary residence permit, is by acquiring real estate in Riga or in one of the other main
cities of Latvia worth EUR 142,300 or EUR 71,200 respectively.
The given regulation has encouraged demand for apartments in Riga central areas and
Jurmala - a resort city on the shore of the Baltic sea, mainly from Russia and other
Independent States Union countries.
As at the end of 2010, 55 investors (with family members 121) received Residence permits
(30 per cent of them through real estate investment).
Foreign buyers are mainly interested in high-quality, renovated or newly built apartments,
with developed infrastructure located in the Riga central and prestigious areas, such as the
“embassy area”, Riga historical centre, the Old Town and Jurmala;
Typical demand is for apartments with full interior decoration, 3 - 4 rooms with total area of
80 - 120 sqm and a parking space.
However, the supply of such apartments is limited and there is shortage of quality products
in the market, thus, we anticipate increased activity in development of luxury residential
projects, both in Jurmala and the Riga historical centre.
In general, in the Riga residential market a stabilizing trend was observed during 2010. The
lowest level in terms of price was reached in 2009.
Buyers are still price sensitive and evaluate the quality, location and management of the
property before making the decision to acquire real estate.
Activity registered in the Land Book transactions has increased by 14.5 per cent in
comparison with 2009. One of the influencing factors are banks have been repossessing
properties from distressed landowners.
An increase in the number of transactions registered in the Land book indicates that the
residential market is on its way to recovery and stabilization.
The majority of transactions in the residential segment took place in secondary markets
among local residents.
During 2010 Nordea Bank has issued the majority of mortgages for newly built apartments.
Average loan term is 3 months EURIBOR + 3 per cent.
More than half of the transactions in the residential market are made without bank financing
by using equity and savings.
CONTACTS: DENISS KAIRANS - d.kairans@colliers.lv l MARIJA KAPELKA - m.kapelka@colliers.lv
Colliers International | p. 21