The residential market atmosphere in the 1st quarter of 2015 was still affected by some negative factors, e.g. uncertainties related to the changes in bankruptcy law and changes to the Immigration Law adopted in 2014 regarding the new temporary residence permit acquisition requirements.

Changes to the Immigration Law adopted in September 2014 led to non-residents reducing their demand in the residential market of Latvia, with Russian citizens showing still less interest due to the escalation of geopolitical events and the ruble depreciation, and such tendency was observed also in the first quarter of 2015. These factors negatively affected the exclusive property rental market as well.

Head of the Customer Service Department of Latio, Aldis Riekstins noted: "A positive signal for the residential market in the first quarter was the regulation of the principle of “left keys”, allowing to make a choice, and the implementation of the state guarantee program Altum for young families with children, helping resume mortgage lending activities".

"The market is currently embraced with waiting attitude and all its segments are re-focusing on local buyers, adjusting prices and business plans to the extent possible. Nonetheless, even prices of new residential projects in residential districts still have not reached the level to meet the demand", said Aldis Riekstins.

The market is also waiting for solutions at the national level, which in the longer term will be oriented at the property market development, so, the current situation will change and the market will revitalize.

A reduced demand in non-resident oriented segments resulted in fall in prices observed for the first time since the economic slowdown in 2009. In the exclusive segment it ranged from 10-15%, downtown flats - 7-10%, flats in new residential projects in residential districts - 5-7%.

Demand in the standard-type flats market remained at a high level, in some suburban areas exceeding supply. Despite a tense market situation, an average price of one square meter in a standard-type flat has increased by 7% in one year. The price rise is rather moderate, because with prices reaching a certain level, buyers will tend to prefer flats in new projects, finding such choice more reasonable.

In respect of the number of deals, compared with the relevant period in 2014, growth was replaced by recession – the number of deals in Riga decreased by 4%, in other territories of Latvia - by 0,7%, for regions are less sensitive to the slowdown in non-residents’ activities.

Residential market report for the 1^st quarter of 2015 is available on the website of Latio, Section Market Analysis, http://www.latio.lv/lv/pakalpojumi/tirgus-analize