
Residential property prices in Latvia continue to rise strongly, amidst limited supply as well as stronger economic growth. According to Arco Real Estate’s figures, apartment prices in Riga surged by 9.03% (5.99% in real terms) to €761 (US$907) per sq. m. during the year to October 2017, up from a y-o-y rise of 7.22% during the same period last year.
Real estate agent OberHaus shows more muted growth, with the average apartment prices in Riga rising by 4.78% y-o-y in October 2017 to €1,205 (US$1,435) per square metre (sq. m.), a sharp slowdown from last year’s 9% growth, according to real estate agent OberHaus. When adjusted for inflation, apartment prices rose by just 1.87% over the same period.
OberHaus tends to deal in high-end city-centre housing, while Arco deals in the estates.
Outside Riga, apartment prices are also rising rapidly.
In the third quarter of 2017, the Lavian economy grew by 5.8% from the same period last year, the strongest growth in the Baltics in Q3 and the fastest pace since Q1 2012, according to the Central Statistical Bureau of Latvia (CSB). The economy is projected to grow by 4.5% this year, from annual expansions of 1.9% in 2016, 2.7% in 2015, 2.1% in 2014, 2.6% in 2013, and 4% in 2012, according to Latvia’s Ministry of Economics.
“The number of apartments offered for sale has gone down, month on month, since April,” said BALSTS. “Owners are willing to wait for further price increase.”
“Price growth is driven by the protractedly rising demand and the limited supply of good quality apartments in the most demanded neighbourhoods,” said Latio.
The neighborhoods in Riga with the highest demand include Purvciems, Kengarags, Imanta, and Plavnieki. Strong demand is also recorded in Ziepniekkalns, Jugla, Iļģuciems and Vecmīlgrāvis.
Why the strong demand? Partly because foreigners get a five-year residence permit in Latvia if they buy residential real estate, under Immigration Law amendments implemented on July 1, 2010. The conditions were then (according to Baltic Legal):
Since the foreign real property buyer visa scheme was launched in July 2010, most foreign buyers have been Russians, looking for properties in Riga and Jurmala. With Latvia considered to have one of the lowest house prices in Europe, foreigners now account for 70% of all property transactions. In recent years, most of the in-demand properties were located in Jurmala, according to the Office of Citizenship and Migration Affairs. Russians have made the most purchases, followed by Ukrainians, Chinese, Kazakhs, and Uzbeks, according to Arco Real Estate’s chairman of the board of directors, Aigars Smits.
In September 2014, Immigration Law amendments increased the threshold for obtaining a residence permit and introduced other conditions and costs, if a foreigner’s real estate was registered in the Land Register after September 1, 2014:
Real estate agent OberHaus shows more muted growth, with the average apartment prices in Riga rising by 4.78% y-o-y in October 2017 to €1,205 (US$1,435) per square metre (sq. m.), a sharp slowdown from last year’s 9% growth, according to real estate agent OberHaus. When adjusted for inflation, apartment prices rose by just 1.87% over the same period.
OberHaus tends to deal in high-end city-centre housing, while Arco deals in the estates.
Outside Riga, apartment prices are also rising rapidly.
- In Ogre, one of Latvia’s greenest towns due to its amazing parks and forests, the average apartment price increased 14.3% during the year to October 2017 to €543 (US$647) per sq. m.
- In Kauguri, a popular residential area in the western part of Jurmala, the average apartment price rose by 11.1% y-o-y in October 2017, to €522 (US$622) per sq. m.
- In Salaspils, mostly known for its military history, the average apartment price rose by 16.1% y-o-y in October 2017, to €606 (US$722) per sq. m.
- In Jelgava, a hospitable city located on the banks of the River Lielupe, the average apartment price surged 18.9% during the year to October 2017 to €471 (US$561) per sq. m.
In the third quarter of 2017, the Lavian economy grew by 5.8% from the same period last year, the strongest growth in the Baltics in Q3 and the fastest pace since Q1 2012, according to the Central Statistical Bureau of Latvia (CSB). The economy is projected to grow by 4.5% this year, from annual expansions of 1.9% in 2016, 2.7% in 2015, 2.1% in 2014, 2.6% in 2013, and 4% in 2012, according to Latvia’s Ministry of Economics.
“The number of apartments offered for sale has gone down, month on month, since April,” said BALSTS. “Owners are willing to wait for further price increase.”
“Price growth is driven by the protractedly rising demand and the limited supply of good quality apartments in the most demanded neighbourhoods,” said Latio.
The neighborhoods in Riga with the highest demand include Purvciems, Kengarags, Imanta, and Plavnieki. Strong demand is also recorded in Ziepniekkalns, Jugla, Iļģuciems and Vecmīlgrāvis.
Why the strong demand? Partly because foreigners get a five-year residence permit in Latvia if they buy residential real estate, under Immigration Law amendments implemented on July 1, 2010. The conditions were then (according to Baltic Legal):
- The transaction should exceed €142,000 (US$ 169,150) in Riga or Jurmala, or €71,000 (US$ 84,575) in other regions;
- Only non-cash funds may be used to buy real estate;
- The buyer must not have any real estate tax arrears in Latvia (and must never have had such arrears);
- Transaction concluded after July 1 2010.
Since the foreign real property buyer visa scheme was launched in July 2010, most foreign buyers have been Russians, looking for properties in Riga and Jurmala. With Latvia considered to have one of the lowest house prices in Europe, foreigners now account for 70% of all property transactions. In recent years, most of the in-demand properties were located in Jurmala, according to the Office of Citizenship and Migration Affairs. Russians have made the most purchases, followed by Ukrainians, Chinese, Kazakhs, and Uzbeks, according to Arco Real Estate’s chairman of the board of directors, Aigars Smits.

- Minimum transaction value of real estate located anywhere in Latvia must be €250,000 (US$ 297,798).
- The total cadastral value of the property at the time of acquisition should be at least €80,000 (US$ 95,295).
- Payment of a state budget contribution worth 5% of the real estate’s transaction value.
Analysis of Latvia Residential Property Market »
RENTAL YIELDS
Last Updated: Sep 15, 2017
Gross rental yields, i.e., the gross return on investment in an apartment if fully rented out, in the centre of Riga are 5.7% for a 50 square metre (sq. m.) apartment. Such an apartment might cost around EUR 450 per month to rent, but around EUR 90,000 to buy.
These are moderately good yields. But in the centre larger apartments of 120 sq.m. yield only 3.8%. Our research suggests that rents that people are prepared to pay in the centre for these larger apartments are less than they might be prepared to pay, say, in Jurmala, where the flats are mostly new. EUR 275,000 is a typical price for a 120 sq. m. apartment in the centre, while EUR 300,000 is typical for a 120 sq.m. flat in Jurmala, but the rent you might get on the latter seems to be 1/3 higher, bringing yields up to 4.8%.
The property market´s recovery began in 2010 and accelerated in 2011, but since then the market has been much quieter.
Round trip transaction costs are low to moderate in Latvia. See our Property transaction costs analysis for Latvia and Property transaction costs in Latvia, compared to the rest of Europe
These are moderately good yields. But in the centre larger apartments of 120 sq.m. yield only 3.8%. Our research suggests that rents that people are prepared to pay in the centre for these larger apartments are less than they might be prepared to pay, say, in Jurmala, where the flats are mostly new. EUR 275,000 is a typical price for a 120 sq. m. apartment in the centre, while EUR 300,000 is typical for a 120 sq.m. flat in Jurmala, but the rent you might get on the latter seems to be 1/3 higher, bringing yields up to 4.8%.
The property market´s recovery began in 2010 and accelerated in 2011, but since then the market has been much quieter.
Round trip transaction costs are low to moderate in Latvia. See our Property transaction costs analysis for Latvia and Property transaction costs in Latvia, compared to the rest of Europe
TAXES AND COSTS
Last Updated: Jul 13, 2017
Rental Income: Rental income earned by nonresident property owners are taxed at the standard income tax rate of 23%. Property taxes and depreciation expenses are deductible.
Capital Gains: Capital gains are taxed at a special rate of 15%.
Inheritance: There is no inheritance tax.
Residents: Residents are taxed on their worldwide income at a flat rate of 23%.
Capital Gains: Capital gains are taxed at a special rate of 15%.
Inheritance: There is no inheritance tax.
Residents: Residents are taxed on their worldwide income at a flat rate of 23%.
BUYING GUIDE
Last Updated: Jul 14, 2017
Roundtrip buying costs range from 4.121% to 7.121%. However, this can be as high as 28.121% because of the 21% VAT on newly-built properties. The real estate agent’s commission is negotiable from 2% to 5%.
LANDLORD AND TENANT
Last Updated: Nov 10, 2006
Latvia luxury houses for saleLatvia’s rental market is generally pro-landlord.
Rents: Rents can be freely agreed between landlord and tenant. Rent control exists only on denationalized buildings.
Tenant Security: Contracts for any period of time are possible, and terminate on the expiry of the term, without need for notice. If the tenant withdraws from the lease, he can in theory be made to pay the entire amount of the lease or rental payment.
Rents: Rents can be freely agreed between landlord and tenant. Rent control exists only on denationalized buildings.
Tenant Security: Contracts for any period of time are possible, and terminate on the expiry of the term, without need for notice. If the tenant withdraws from the lease, he can in theory be made to pay the entire amount of the lease or rental payment.
ECONOMIC GROWTH
Last Updated: Dec 29, 2017
Economic growth strong; Russian relations improving

In the third quarter of 2017, the economy grew by 5.8% from the same period last year, the strongest growth in the Baltics in Q3 and the fastest pace since Q1 2012, according to the Central Statistical Bureau of Latvia (CSB). The strong growth was fuelled by favourable external factors, such as robust growth in other EU member states and availability of EU funds, and a fast inflow of investment in the construction sector.
The economy is projected to grow by 4.5% this year, from annual expansions of 1.9% in 2016, 2.7% in 2015, 2.1% in 2014, 2.6% in 2013, and 4% in 2012, according to Latvia’s Ministry of Economics.
Latvia’s public debt was projected to fall to 39.1% of GDP in 2017, down from 40.6% in 2016, according to the European Commission.
In Q3 2017, nationwide unemployment stood at 8.5%, down from 9.5% a year earlier, according to the CSB. The country’s jobless rate averaged 17.1% from 2009 to 2012 and 10.6% from 2013 to 2016.
Overall inflation was 2.7% in November 2017, slightly down from 2.8% the previous month but up from just 1.3% a year earlier, according to the CSB. In 2016, overall inflation stood at just 0.1%, from 0.2% in 2015, 0.7% in 2014, 0.01% in 2013, 2.3% in 2012, and 4.2% in 2011, according to the International Monetary Fund (IMF).

“The accession process has already brought significant benefits and improvements for Latvia: it has been the driving force behind reforming the governance of state-owned capital enterprises and has also served as an additional incentive to enhance our capacity in countering bribery in international business transactions,” Prime Minister Māris Kučinskis said.
In February 2016 PM Kučinskis took office after former PM Laimdota Straujuma resigned in December 2015, due to the infighting within the ruling coalition. PM Kučinskis is a member of the Union of Greens and Farmers, and Latvia’s first prime minister not to be a member of the Unity Party since 2009.
Aside from PM Kučinskis, Latvia also elected Raimonds Vējonis as state president in June 2015. State President Vējonis is a member of the Green Party, which is a part of the Union of Greens and Farmers.
Latvia’s relations with Moscow deteriorated following Russia’s annexation of Crimea in 2014. Russia’s aggression prompted Estonia, Lithuania, and Latvia to seek NATO troop deployments in their nations. Article 5 of NATO’s charter states that a military attack on one member state is an attack on all of them.
However in November 2017, Russia and Latvia signed an agreement on easing the procedures on mutual journeys of border residents of the two countries; and the plan of cooperation between the two countries for 2018-2019 in such areas as security, cooperation in international organizations, and the Baltic Sea region.