House prices were down 0.13% y-o-y in Q2 2019

Latvia’s housing market is now cooling. Average apartment prices in Riga fell slightly by 0.13% during the year to Q2 2019, in contrast to the prior year’s 2.63% growth. Quarter-on-quarter, house prices in the capital city were almost unchanged during the latest quarter.

Demand rising; supply falling

The number of transactions in new housing projects in Riga rose by 31% from a year earlier in the first half of 2019, according to Arco Real Estate. But the total number of apartments offered for sale fell by 13% in July 2019 from the same period last year. Apartment supply in the largest housing estates in Riga dropped 4% over the same period.

Rents, rental yields: moderate rental yields of 4.1%

Riga apartment costs are around €2,789 per sq. m. 

Latvia: typical 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 economic growth slowed to 2.1% y-o-y in Q2 2019, down from expansions of 3% in Q1 2019 and 5.1% in Q4 2018, according to the Central Statistical Bureau of Latvia. In fact, it was the slowest pace since Q3 2016. Recently, the Bank of Latvia lowered its GDP growth forecast for this year to 2.9% from its previous projection of 3.5%, amidst global economic uncertainty and weakening external demand.