“Buyers’ demand for new apartments over the past few years has been gradually increasing, so the offer of good apartments in fully completed new building projects, at prices corresponding to the market situation, is shrinking. Resurgence of activity is facilitating both resumption of previously frozen projects and initiation of new ones. Some of the new projects held by banks are also being completed, while others are sold to investors or developers who are willing to continue them. In the near future, the construction or renovation of several residential buildings will be completed in the center and residential neighborhoods of Riga, thereby increasing the offer of apartments suitable for both foreign and local buyers,” explains Vija Gailīte, Head of Latio Residential Brokerage Department.

The expert adds that several developers who intend to build high-class residential buildings and own plots of land with elaborated projects still choose to wait, as future demand can be affected by potential changes in the procedure of granting temporary residence permits.

Latio has currently summarized information about 120 new projects in Riga and its vicinity in which the developers or companies connected with banks are offering apartments for sale for the first time. The apartment buildings have been commissioned in the period from 2006 to 2013.

In September, the overall activity of buyers in the new apartment segment remained at the previous month’s level. Foreign citizens are seeking mainly apartments priced at 150–180 thousand euros. For buyers who intend to invest a greater amount than the minimum investment threshold established by the Immigration Law, an important factor is the profitability of renting out the property, so great attention is paid to the project’s location and quality;the apartment must have complete interior finishing, kitchen appliances. Buyers of new apartments in the residential neighborhoods and outskirts of Riga also wish to purchase fully completed apartments with interior finishing.

The demand of local buyers is focused mainly on new project apartments of the economy class, but interest in more expensive new apartments has also been growing recently.

The trend of price increase of new apartments has continued in the center and residential neighborhoods of Riga. The average price of new apartments (also apartments in fully renovated buildings) in the center of Riga in Q3 2013 was 2500 euros per square meter – an increase of 2% compared to Q2 2013, and an increase of 13.4% compared to Q3 2012. The average price of new apartments (also apartments in fully renovated buildings) in Old Riga and its vicinity in Q3 2013 reached 4200 euros per square meter – an increase of 1.2% compared to Q2 2013, and a 9.4% increase year-on-year. The average price of new apartments in the residential neighborhoods of Riga in July–September 2013 was 1330 euros per square meter, exceeding the average price of the second quarter by 0.8%, and up 13.3% from Q3 2012.

The price range of transactions is rather wide and depends on the project’s location, the finishing of the apartment, and other factors. The average price of new project apartments in the outskirts of Riga in September was 700–900 euros per square meter, in the residential neighborhoods of Riga – 900–1500 euros per square meter, in the center of Riga (including also the outer parts of the center) – 1500–3500 euros per square meter. The price of high-quality, renovated apartments in good locations in the city center can reach 5000–6000 euros per square meter.

Purchase transactions involving new apartments in Riga comprise approximately 10% of all apartment transactions each month.