Trend: house prices up 1.33% y-o-y in 2018
Latvia’s housing market is now cooling with the average apartment prices in Riga rising by 1.33% during 2018, sharply down from the prior year’s 6.5% growth. Quarter-on-quarter, house prices in the capital city rose slightly by 0.2% during the latest quarter.
Analysis: Demand and supply falling
Demand is weakening. In January 2019, the number and value of apartment transactions in Tallinn fell by 7.3% y-o-y and 1.2% y-o-y, respectively. Likewise, outside Tallinn, the number of transactions fell by 5.2% in January 2019 from a year earlier and transactions value dropped 6.8%, according to Estonian Land Board.
In December 2018, the total number of apartments offered for sale in Riga dropped 11% from a year earlier, according to Arco Real Estate. Likewise, apartments offered for sale in the largest housing estates were also down by 6% over the same period.
Rents, rental yields: moderate rental yields of 4.1%
Riga apartment costs are around €2,789 per sq. m.
| Latvia: city centre apartment, buying price, monthly rent (120 sq. m) | |||
| Buying price | Rate per month | Yield | |
| Riga | € 334,680 | € 1,132 | 4.06% |
Recent news: Latvia’s economy grew by a robust 4.8% in 2018 from a year earlier, based on the preliminary figures from the Ministry of Finance, up from annual GDP growth rates of 4.5% in 2017, 2.2% in 2016, 3% in 2015, and 1.9% in 2014. It was the fastest expansion in seven years. The economy is projected to expand by 3.2% this year and by 3% in 2020.
