A recent report on Latvia real estate reveals a slight upward momentum for a market characterized by double digit growth since 2010. If further evidence of Europe’s stagnation is needed, Latvia property markets tell the tale sufficiently. The average price of a Riga apartment climbed only about 2 percent to just under €990 euro per square meter according to the Ober Haus Poland and Baltic price index.
Adjusted for inflation, just this figure represents the lowest growth in prices since 2010, and other reports show the most recent numbers being even worse, unchanged compared with relatively massive growth before the slowdown took place because of the 2007 recession. This chart (PDF) from Ober Haus shows clearly the Riga apartment market peaking at around 2,323 per square meter in 2007, with today’s figures roughly equaling prices from way back in 2004.
Basically confirming this data only takes one search at WorldEstate.com for Latvia. We found instantly a 3-room apartment in Pardaugava just minutes away from the city center priced at € 985 euro sq/m. As for the weight of this news, Baltic Business News just reported earlier this week of banks needing to offload Latvia properties. The pileup of bad loans having added to the overall economic situation in Europe, Latvia is actually one of the hardest hit where “relative” constricting of capital is concerned. Having created so called “Special Purpose Entities” (SPEs) to try and assume the potential of failed real estate projects in the country, banks now see these as insolvent. So, the move to fire-sale these properties emerges.
While this is bad news where the overall situation, even the localized one goes, the opportunity for those with far reaching strategies seems obvious. We will keep you appraised of the situation for the near future.