The possibility of receiving a temporary residence permit (TRP) in exchange for buying real estate in Latvia has aroused the interest for premium-class objects among third country residents. However, the criteria prioritised by foreign buyers are highly selective and very dissimilar. For some this is a recreational option, for others a source of potential profit. The issue has been discussed at the seminar organised by Baltic Sotheby’s International Realty (which operates in the premium realty sector) for its partners in Russia, Belarus and Israel.
“Amendments to the Republic of Latvia Law on Immigration, entitling one to a residence permit in exchange for a real property purchase have certainly increased demand on the part of foreigners”, says Vestards Rozenbergs, co-owner and chairman of the Board of Baltic Sotheby’s International Realty. However, these same amendments, he claims, have provoked an influx of new real estate companies. Without adequate experience or knowledge but sensing a quick profit, these firms can damage the image that professional players on the Latvian market have worked to create. “Our market is small and currently affected by a sort of thirst for gambling; this situation can quickly bring about a moment of truth”, Rozenbergs adds.
Mikhail Parinov, Chairman of the Board of AS “Padva un Partneri Baltija”, noted the following at the seminar: “The bureaucracy of authorities in Latvia is worthy of applause. There are clear criteria for granting or refusing TRP status, no subjective evaluation components, and a revolutionary point compared to other countries – no requirement of residing in Latvia for a certain period of time (accepted global practice is about 180 days each year) have all done their part. Buying real property in Latvia today is the simplest and quickest way to obtain a TRP. The entire procedure takes just a couple of months, with the longest part being property selection itself.”
According to Vestards Rozenbergs, Baltic Sotheby’s International Realty has an extensive base of premium realty objects in Riga, Jurmala and other cities across Latvia to satisfy every buyer’s most exacting tastes – from a unique smart summer house in Jurmala at the spearhead of high technology, to a clubhouse within one minute’s walk from the Dzintari concert hall, to Riga’s only flat that provides a view of the Daugava waterfront, has dedicated underground parking and a wine cellar that dates back to the time of Peter the Great. “By applying our business and sales know-how, we consciously work to reduce the number of objects to choose from, only offering a potential buyer the properties that will suit their individual lifestyle,” Rozenbergs adds.
“A Russian buyer comes prepared,” adds Yulia Kraschenko, representative of Moscow’s EuroLot real estate agency, “Because of the proactive advertising of Latvian developers. Demand for real property in Latvia has increased by half in a short span of time, with interest primarily for large detached houses in Jurmala worth up to EUR 1 million and for apartments in the Old Town, worth up to EUR 200,000. 70% of buyers are in the 50+ demographic and concerned their health. The others are mostly people aged 30-35 who have families with children, interested in the possibility of getting a European education at a lower price”.
Seminar participants are of the opinion that Russians are looking for good places to live, whereas Israeli citizens come purely for investment purposes. One of the visitors at the event remarked that a realtor with a clear-cut business plan specifying an annual return of 11 to 12 per cent is practically a guarantee that Israeli investors will buy that realtor’s property in Latvia.