House prices were up 5.13% during the year to Q3 2021

Latvia’s housing market shows significant improvement, with the average apartment prices in Riga rising by 5.13% during the year to Q3 2021, in contrast to the prior year’s 1.34% decline. Quarter-on-quarter, house prices in the capital city increased 2.39% during the latest quarter.

Demand improving gradually

Demand is now rising gradually in Riga, after apartment sales fell by 9.5% to about 8,900 units in 2020 from a year earlier, according to Ober Haus, amidst a decline in foreign demand due to lockdowns and travel restrictions.

Foreigners account for about 70% of all property transactions in the country. The number of new dwellings authorized in Latvia fell by 6.5% y-o-y to 3,101 units in 2020, and the total area dropped 14.7% to 460,000 sq. m., according to the Central Statistical Bureau. 

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 economy grew by 5.1% in Q3 2021 from a year earlier, following a y-o-y growth of 11.1% in the previous quarter, as the vaccination drive allowed the economy to reopen. As a result, the European Commission recently upgraded its 2021 economic growth forecast for Latvia to 4.7%, from its earlier projection of a 3.8% expansion.

The Latvian economy contracted by 3.5% during 2020 due to the pandemic, following expansions of 2.2% in 2019, 4.3% in 2018, and 3.8% in 2017, according to the Central Statistical Bureau of Latvia.