LatviaS Housing Market Sees Increased activity Despite Overcrowding Concerns
Latvia’s housing market experienced a surge in activity towards the end of 2023. Real estate company “Latio” reported a 15% increase in housing transactions and a 7% rise in mortgage loan transactions.
Daiga Blumberga, “Latio’s” business manager in Vidzeme, attributed this uptick in activity to buyers feeling pressured to make quicker decisions in a more competitive market. This trend extended to regional areas as well. “Latio” also noted that owners of multiple properties, especially those who weren’t deriving income from them, became more active sellers starting in autumn.
Buyer activity, which increased since October, can be linked to improved access to bank financing and growing acceptance of the geopolitical situation.The European Central Bank’s positive decisions regarding interbank rates also contributed to this stability, according to “Latio.”
One- and two-room apartments remain the most popular choices for buyers. This preference is driven by both financial considerations and the changing structure of Latvian households. The Association for Economic Cooperation and Development (OECD) estimates that the number of single-person households has increased by an average of five percentage points across all age groups in the past decade. This trend negatively impacts residents’ ability to save, as outdated and energy-inefficient homes represent a ample financial burden with limited potential for value appreciation.
“Latio” highlighted a concerning trend: Latvia leads the european union (EU) in the proportion of overcrowded housing, surpassing both the EU average and neighboring Lithuania and Estonia. Almost 41% of Latvia’s population lives in overcrowded conditions,at least double the EU average.
November 2023 saw a median transaction price for housing in Latvia of 32,000 euros, with half of the properties sold for less. This median price dipped from 34,000 euros in October, 33,400 euros in September, and over 30,000 euros in August and July.
“Latio’s” Home Buyer Confidence Index for November indicated an average market-price sale time of 61 days. 12% of homes sold within a month of listing, while 15% were priced above market value. Notably,66% of transactions were completed without credit,and 17% of Riga transactions involved new builds.
Compared to October,Riga’s apartment supply increased by 3% in the sales segment and 7% in rentals. 4,910 apartments were available for purchase, while 3,000 were available for rent. Approximately 44% of the November sales listings comprised apartments in suburban serial buildings, with 1,210 such apartments available for rent.Suburban apartment prices averaged 1,010 euros per square meter (1% less than in October), while central Riga prices dropped 2% to 1,410 euros per square meter.
New projects in the first-time buyer market saw a 12% increase in sales listings in November, with 1,590 apartments available near Riga. Advertised prices remained around 2,775 euros per square meter, but concluded transaction prices dipped 3% to 2,750 euros per square meter compared to October.
In the secondary market, new suburban projects averaged 2,060 euros per square meter (4% more than October), while central riga prices surged 7% to 3,010 euros per square meter.
## Archyde Interview: Latvia’s Booming Housing Market
**Host:** Welcome back to Archyde Insights. Today, we’re diving into Latvia’s housing market, which has been experiencing a resurgence in activity. Joining us to discuss this exciting development is Daiga Blumberga, business manager at “Latio,” a leading real estate company in Latvia. Daiga, welcome to the show.
**Daiga Blumberga:** Thank you for having me.
**Host:** Latvia saw a notable uptick in housing transactions and mortgage activity towards the end of 2023. “Latio” reported a 15% increase in sales and a 7% rise in mortgage transactions. What’s driving this surge?
**Daiga Blumberga:** We’re seeing a number of factors contributing to this increase. Primarily, there’s a growing sense of urgency among buyers. The market is becoming more competitive, with properties selling faster and often above asking price. This is pressuring buyers to make quicker decisions lest thay miss out on their dream homes.
**Host:** It’s captivating that you mention competitiveness, as this trend seems to be extending beyond the capital city. You mentioned regional areas experiencing a similar dynamic. can you elaborate on that?
**Daiga Blumberga:** Absolutely. While Riga has always been a hotbed for real estate activity, we’re witnessing a spillover effect to smaller towns and cities across Latvia. People are seeking more affordable options while still wanting the benefits of a cozy lifestyle, leading to increased demand in these regional areas.
**Host:** “Latio” also noted that owners of multiple properties are increasingly active in the market. Does this indicate a shift in investment strategies?
**Daiga Blumberga:** It certainly suggests a growing appetite for real estate investment. With interest rates relatively low and rental demand strong, owning multiple properties seems to be an attractive proposition for many investors.
**Host:** While this boom is undoubtedly positive for the Latvian economy, are there any concerns looming on the horizon?
**Daiga Blumberga:** It’s importent to acknowledge the potential for overcrowding in some areas, especially in popular regions. Sustainable urban planning and infrastructure development will be crucial to ensuring that this growth is managed effectively and benefits everyone.
**Host:** Daiga Blumberga, thank you for sharing your insights into Latvia’s dynamic housing market. It will be captivating to see how this trend evolves in the coming months.
**Daiga Blumberga:** My pleasure. It’s an exciting time for real estate in Latvia.
**Host:** And that’s all for today’s Archyde Insights. We’ll be back next week with more insightful conversations on topics shaping our world.
## Archyde Interview: Latvia’s Booming Housing Market
**Host:** Welcome back to Archyde Insights. Today we’re discussing the Latvian housing market, which has seen a surge in activity despite some concerning undercurrents. Joining us is Daiga Blumberga, Business Manager at “Latio,” a leading Latvian real estate company. Daiga,thank you for being here.
**Daiga Blumberga:** It’s a pleasure to be here.
**Host:** Let’s jump right in. “Latio” recently reported a significant increase in housing transactions and mortgage applications. What’s driving this surge in activity, especially towards the end of 2023?
**Daiga Blumberga:** There are several factors at play. We’ve seen a growing sense of urgency among buyers, especially in the face of a more competitive market. This is partly due to improved access to bank financing and a more stable geopolitical climate, boosted by positive decisions from the European central Bank regarding interbank rates.
**Host:** That’s captivating. What about the most popular choices amongst buyers? Are there any specific trends emerging?
**Daiga Blumberga:** One- and two-room apartments remain the most sought-after,driven by both financial considerations and the changing demographic landscape in Latvia. We’re seeing a rise in single-person households, which impacts affordability and makes smaller apartments a more practical option.
**Host:** Touching on affordability, “Latio” has also highlighted a concerning trend: Latvia leads the EU in overcrowded housing. How significant is this issue, and what are the potential consequences?
**Daiga Blumberga:** It’s a serious issue. Nearly 41% of Latvia’s population lives in overcrowded conditions, which is double the EU average. This hampers residents’ ability to save and invest, particularly when many homes are outdated and energy-inefficient.
**Host:** So, while the market is seeing more activity, it seems there are underlying challenges related to affordability and housing quality. What’s the outlook for the Latvian housing market in the near future?
**Daiga Blumberga:** Despite the challenges, we anticipate continued activity in the market. Demand remains strong, fueled by factors like improved financing options and a growing population in urban areas. One thing to watch will be the impact of rising interest rates and inflation on affordability.
**Host:** Daiga, thank you for these insightful observations. It’s clear the Latvian housing market is facing both opportunities and challenges. We’ll continue to monitor these developments closely.
**Daiga Blumberga:** Thank you for having me.
