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Despite the usual seasonal slowdown, the housing market started the year with an unexpected surge in buyer interest. The number of available homes has dropped by more than a third, while prices in Riga’s primary market segment for new developments have declined by 6%. Even unrenovated properties, once overlooked due to high construction costs, are now attracting buyers. Market analysts and real estate experts at Latio anticipate above-average activity in the first half of the year, partly driven by changes in capital gains tax, which have prompted buyers to close deals in January. Additionally, expectations of a Euribor decline and overall market stabilization are fuelling forecasts of rising property prices. These trends are highlighted in the latest Home Buyer Confidence Index.

The past year in the real estate market was marked by cautious optimism among buyers and sellers. While the first half of the year showed no significant signs of housing market recovery, the second half brought a notable increase in activity, prompting more buyers to make decisions. What trends do Latio experts foresee for the real estate sector in 2025?

In response to growing interest from Baltic customers in evaluating real estate across neighbouring countries, the three leading real estate companies: “Inreal” (Lithuania), “UUS MAA” (Estonia), and “Latio” (Latvia) have signed a cooperation agreement. The goal is to streamline property evaluation and accelerate the purchasing process across these countries.

The pace of transactions has slowed down noticeably in August due to the holidays. There is also no rush on the sellers' side, with owners adding new listings to the market less frequently. As Latio Real Estate agents have observed, the Euribor factor is playing a less and less important role among home buyers. As people have adapted to the market situation, they have also accepted property prices and are more realistic about the mortgage options available to them - especially for amounts up to EUR 100 000. At the same time, buyers continue to take thoughtful pauses before deciding to buy - especially those considering new projects. Traditionally, August also sets the rental market in motion as students look for accommodation for the new academic year, and this year has been no exception.
 

The housing market in the capital has been stagnant for eight consecutive years, with 59% of transactions occurring without a mortgage. In contrast, the market in western Latvia is becoming increasingly active, as highlighted by the latest "Home Buyer Confidence Index". In Liepaja, prices for apartments in the secondary market of new developments have dropped by 12%, leading to a surge in transactions. There is significant interest in purchasing homes in the City of Winds, including from Lithuanians, who often prioritize price when buying older properties, despite the abundance of new developments in nearby Klaipeda. Will Liepaja meet the growing demand for high-quality housing, and how are its southern neighbours addressing their real estate market challenges?

Since mid-2023, when a relatively sharp fall in forest property prices was observed, the situation in the segment has remained stable. The low demand for Latvian timber on the European market, as well as other factors, encouraged forest owners and buyers not to rush into decisions already last year, while the decision of the Constitutional Court in April this year to annul the Cabinet of Ministers' regulations that allowed the cutting of younger trees with smaller diameters put owners in a waiting mode. "Latio" Forest and Agricultural Land Department concludes that the abolition of the regulations will most severely impact small-scale forest owners with a high proportion of new forest stands, delaying their development by at least five years. Trends in the forest and agricultural land segment over the first half-year are summarised in the latest "Rural Property Market Index".