There is a shortage of luxury flats that are offered for rental in the quiet city centre of Rīga and in Old Rīga, so potential renters are forced to think about an alternative – flats in new buildings outside of the city centre. In Jūrmala, in turn, there is great demand that is in part based on the New Wave music festival, and so unusual transactions are being concluded for unimaginable prices.
The demand for luxury-class flats in Rīga exceeds supply. Potential renters are interested in classical flats which have been renovated and are found in equally renovated buildings in the quiet centre of Rīga. Expert Evita Pudane from Baltic Sotheby’s International Realty claims that there is an insufficient number of offers in this regard. For that reason, potential renters are focusing their view on new buildings outside of the centre of the capital city.
The budget of renters who wish to rent a two or three-bedroom flat is between EUR 1,200 and EUR 3,000, or between EUR 10-12/m2 per month. They are interested in renting flats for one year or longer with the opportunity to extend the contract once it expires.
“The demands of potential renters are at a fairly high level,” says Pudane. “That means that benefits that are based on sensible compromises are received by those owners who are prepared to deal with the rental fee or the desire of the renter to replace a sofa or chandelier at the owner’s expense. If the relationship between price and quality is adequate, the flat is rented out within no more than one month’s time.”
It is also true that construction of buildings is proceeding very actively in Jūrmala this year. “New buildings are being erected actively in Jūrmala, and many of them are almost complete,” says Baltic Sotheby’s International Realty co-owner Ilze Mazurenko. “That means that next summer we can expect a larger number of rental apartments in the town, but we predict that the new buildings will not change prices. There is still a lack of high-quality flats in the spa town, and that means that the prices will remain at the same level as in previous years – around EUR 5,000 to 6,000 per month.”
Mazurenko adds that the New Wave competition this year has dictated the rental market in Jūrmala for a short period of time. The enormous popularity of the event and the absence of high-quality offers sometimes mean that non-standard offers are made. “We recently concluded a transaction related to the rental of a house for one week (during the competition for young performers) for more than EUR 25,000,” she adds.
The rental market in Jūrmala has remained almost the same as in previous years this summer. Most renters are families with children, with the family living in the flat permanently, and the head of the family staying there on weekends. Renters are surprised at high prices and the fact that real estate which they visit sometimes is not prepared for rental. That is usually the case when owners offer a home in which they themselves live.
Potential renters also focus on other nuances, including communal services. “Those should be included in the rental fee,” says Mazurenko. “The fee can be a bit higher because of this, because people who are prepared to spend EUR 10,000 to 15,000 for a holiday in Jūrmala deserve a situation in which they do not have to think about minor everyday issues.”
Resource: RENTAL MARKET FOR LUXURY REAL ESTATE IS HOT DURING THE SEASON