Many analysts are trying to evaluate the consequences of such a transition to the value of real estate. On the one hand, the economic situation in Latvia may deteriorate, which will negatively affect the market. On the Other Hand, joining the euro zone may affect the minimum cost of investment, at which you can get a residence permit in the European Union. Namely this moment. As most studies show, is determining for foreigners buying real estate in Latvia.
The Exchange Leader magazine tried to figure out the situation by publishing on its pages the study of experts of Eurolandrealty.
The interest of the residents of the CIS in Latvia is easy to understand if we consider that in order to obtain a residence permit in such countries of the European Union as Portugal or Spain, it is necessary to invest in real estate of these countries at least half a million euros. In Latvia, the minimum cost of the purchased housing should be about 71 thousand. euro (in the province) or twice as much – about 143 thousand. euro in the capital or large cities.
It is with the low size of this bar that the fears of realtors and buyers are associated. Many are afraid that under the pressure of the European Commission the necessary amount will be significantly increased.
Of cousse, experts are convinced that the Latvian government understands the importance of foreign investment, and will try to prevent sharp changes in this policy. On the Other Hand, the analysis of customer behavior suggests that not everyone is striving to take advantage of the opportunity to save a lot, and are ready to pay the amounts of minimum established by the government. The data show that almost 5000 purchases of real estate by foreigners the vast majority (86%) were committed in Riga and Jurmala. Moreover, approximately 50% of all purchases were in Riga, and 36% – on Jurmala.
At the same time, the opportunity to become a European for half as much as a lesser, having invested money in the province, few took advantage of. Although there, for the opportunity to get a residence permit, almost symbolic (by the standards of most countries of the European Union) is required. Thus, according to experts, even if the necessary amount increases to 200-250 thousand euros, the situation in the investment market will not change significantly.
One of the promising areas of the development of the real estate market is, according to Eurolandrealty experts, will soon be picturesque resort places of Latvia.
As for the segmentation of the market, most transactions in the future, as now, will not occur in the new buildings sector, but in the secondary market. The fact is that new buildings (built after 2001 year) make up only 4.8% in the total real estate volume. Most of the country’s inhabitants live in houses built in the Soviet period. And the situation in the near future is unlikely to change radically.
Experts associate the growth of real estate demand in the province with the fact that the secondary market is more suitable for housing. Comfortable housing just a few kilometers from a large city is currently evaluated quite low. For Example, a comfortable apartment with an area of 124 square meters in Saulkrasts, 300 meters from the sea coast, currently costs only 95 thousand. Euro. A cozy house with a site can be bought for 70-80 thousand euros.
Although new buildings are considered more attractive for investment. Since the investor is more attracted by the surrounding nature or living conditions, but the increase in real estate prices of this type. And over the past two years, the average price per square meter of new construction has increased by 42%. And the prices in new buildings are not oriented to medium -sized Latvians, but on wealthy foreigners (mainly from Russia). And investing, according to experts, is better not in the old apartments of the Soviet period, but in new construction.