Similar as elsewhere in the world, the post-pandemic trends emerge also in Latvia, as remote work opportunities are given preference more often, which has encouraged people to extend their living space and organise comfortable work environment at home. During the pandemic, people have also managed to create savings, which has allowed them to invest these funds in real estate – in 2021, 1,135 transactions for the total amount of EUR 304.8 million were concluded on the Latvian premium real estate market, rapidly approaching the indicators that were recorded during the period from 2006 – 2008, also referred to as “the fat years”.
This is evidenced by the study conducted by premium segment real estate company Latvia Sotheby’s International Realty on the activity of transactions in 2021 in three studied regions and three segments of premium properties: apartments, private houses and land plots for residential construction in Riga, Jūrmala and Pierīga.
This is the first year, when premium market has significantly approached this historical bar, mostly picking up the momentum in Riga, where 756 housing transactions (incl. land plots for construction) were concluded, the total value reaching EUR 188.2 million, which was by 43.3% more than in 2020. Whereas in Jūrmala, 242 premium segment transactions for the total amount of EUR 84.2 million were concluded last year, which is the highest number since 2014. As regards Pierīga, 137 premium real estate transactions have been concluded in 2021, the total value constituting EUR 32.4 million. Compared to 2020, the number of transactions has grown by 104.5%, increasing the amount of investment by 70.5%.
Ilze Mazurenko, the owner and manager of “Latvia Sotheby’s International Realty” reveals that the previous year has been very active on the premium real estate market. “We can see that last year exactly purchase of apartments in Riga was most preferred, particular increase being observed in the overall demand for apartments in the new projects; however, also the number of concluded transactions on purchase of private houses and land plots has increased, which proves once more the desire and possibilities of people to improve their living conditions also during the post-pandemic period.”
Already for the second consecutive year all three reporting regions have had impressive growth in the proportion of transactions of premium segment apartments, increasing up to 78.8% of the total number of transactions in the respective segment or 988 sold apartments with the total value of EUR 240.3 million. Out of this number, 709 apartments with the total value of EUR 170.4 million were sold in Riga, which is the highest level of demand on the Latvian premium real estate market since the temporary residence permit reform in 2014. Respectively, although the number of transactions in 2021 was by 147 transactions higher than last year, their average value increased up to EUR 240,350 (+7.4%, compared to EUR 223,700). At the same time, also the average price per one square meter increased to 2,300 EUR/m2, people choosing increasingly more spacious apartments.
In Pierīga, 99 premium segment apartment purchase transactions were concluded, which is by 110.6% more than one year ago, the total value of transactions reaching EUR 19.2 million, which is by EUR 10.4 million or 117.4% more than in 2020. The average value of apartment transactions in Pierīga has risen, reaching EUR 193,500 (+3.2%). It is interesting that in this case the increase has formed as a result of combination of higher price per square meter, but smaller area of apartments. The average number of square meters has dropped by 14 m2 and constitutes 150 m2, whereas their price has increased by EUR 200 per square meter up to 1,500 EUR/m2 (+14.2% compared to 2020).
As reveals Līga Kohtanena, Senior Sales Consultant at “Latvia Sotheby’s International Realty”, also in Jūrmala the total value of premium apartments purchased in 2021 has increased compared to the previous year, as 180 transactions have been concluded with the total valueof EUR 50.7 million, which is by EUR 10.9 million (+27.4%) more than in 2020. Similar as in Pierīga, also in Jūrmala buyers have chosen smaller housing (a drop by 16.4% to 135 m2), but paying a higher price (increase by 9.5% to 2,550 EUR/m2).
The demand for apartments in new projects is growing in all regions. Among 709 premium apartments purchased in Riga, 662 are located in the new projects. Only 6 of 180 premium apartments purchased in Jūrmala were not located in the new projects, whereas this proportion in the territory of Pierīga is slightly lower – 88 transactions of 99 were concluded for apartments in the new projects.
As regards the Latvian premium private house market, the number of buyers has increased significantly in 2021 – if the year 2020 had 57 premium segment transactions concluded on purchase of private houses in the reporting regions, last year this number has risen up to 89 private houses worth in total EUR 50 million, out of which 22 houses were purchased in Riga, 20 – in Pierīga, and 47 – in Jūrmala. The premium private house market of Riga has increased almost three times last year both in terms of the number of concluded transactions, and their total value.
Transactions in Riga were on average by 6.6% cheaper than in 2020; moreover, investors preferred larger housing, choosing housing with area of 380 m2 on average, which is by 50 m2 more than one year ago.
Whereas the average price of properties in Pierīga has dropped more dramatically – by 24.2%. Contrary to desires of residents of Riga, residents of Pierīga have chosen minimalism in 2021 – the area of purchased private houses has decreased on average by 140 m2, constituting 347 m2. This has resulted in the increase in prices per square meter, compared to 2020, despite the fact that in general transactions have been cheaper by almost one quarter.
A drop in the average price of transactions on Jūrmala’s premium private house market was observed, which was caused by significantly lower demand for exclusive housing with a price exceeding EUR 1 million. Whereas the number of buyers and their investment in the price segment from EUR 350,000 – 500,000 has strongly increased.
Also the market of land for construction experienced a boom in 2021 – 58 properties (in 2020 – 20) were purchased in three reporting regions with the total value constituting EUR 14.5 million. Almost a half – 25 land plots were purchased in Riga in total for EUR 6.0 million, and on average – EUR 238,500. The average price of transactions with land for construction in Pierīga was EUR 223,000, whereas all 18 transactions concluded in 2021 were worth EUR 4.0 million in total. In its turn, the average transaction price in the territory of Jūrmala remained the highest of three reporting regions with EUR 300,000. During the last year, 15 land plots for construction were purchased with the total value of EUR 4.5 million.
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In this report, Latvia Sotheby’s International Realty analyses premium real estate transactions, i.e. over EUR 150,000 for apartments and land plots, and over EUR 350,000 for private homes.
Data: State Unified Computerized Land Register