With a desire to expand their living space and improve comfort conditions, the demand for premium private homes in the first half of this year has been the highest in the last five years, according to the premium segment of real estate company Latvia Sotheby’s International Realty study performed.
In Riga, Pieriga and Jūrmala, 26 premium private houses for 14.6 mln. in euros. In Jūrmala, especially exclusive houses were bought less, which can be explained by their small supply, but in Riga the turnover has increased impressively – by 73%.
The company’s study of business activity in the first six months of 2021 in the three regions examined examined information on private houses that cost more than 350,000 euros.
In the first half of this year, the private house market accounted for 14.7% of the total Latvian premium real estate market.
It has already been reported that a total of 376 properties (high-class apartments, private houses and building land) were purchased in Riga, Pieriga and Jūrmala in the first half of this year for a total of 99.5 million lats. euro. Although the number of premium houses purchased this year (26) is the largest in the last five years and exceeds the amount of 20 houses purchased in six months last year, the turnover in euro terms shows that these 26 houses were purchased for 3.7 million lats. euros was cheaper or the turnover was 20.3% lower than in the first half of last year, when the turnover reached 18.4 mln. euro.
The total turnover data was influenced by the developments in the largest premium private house region – Jūrmala, incl. limited offer in the resort town. Recently, the demand for premium private houses in Pieriga with a desire to expand their place of residence has significantly increased. “I am especially interested in houses in Jūrmala, as well as in such neighborhoods as Mārupe, Bieriņi, Bergi, Carnikava, etc., which are up to 20 – 30 km from the center of Riga. If you have to spend more time in a limited living environment, where both living and working take place, customers start thinking about expanding it for reasons of comfort, especially if the family also has children. outside the city, now it ‘s the other way around, “comments Latvia Sotheby’s International Realty representative Līga Kohtanena.
It is noticeable that customers are looking for houses with an area from 150 to a maximum of 350 m2, unfortunately the supply of new quality houses is very small. There is actually no new, high-quality and high-quality housing stock in Jurmala, so it can be said that the seller can dictate his price, which is not always in line with the market. There is currently a seller’s market.
On the other hand, in the secondary market, where ten and more years old houses in need of repair are available, the offer is wider and the competition is greater. However, the buyer is not always ready to invest additional funds in long-term repairs, so they prefer to pay more and find a house where they can start living right away. The surrounding infrastructure (road condition, etc.) is no less important in choosing a home, especially during the last year, customers appreciate a fast and good internet connection, because they also work at home.
Riga’s premium housing market has traditionally been the smallest, and this half-year has not been an exception either. In these six months, seven private house transactions were concluded in the capital for the total amount of 3.3 million lats. euro. This is impressive – a 73.2% increase in turnover compared to the corresponding period of the previous year by 1.9 million lats. euros for the three houses sold, and also in terms of amount exceeds the achievements of five years, when the turnover in the capital in the first half of the year was usually reached from 1.3 to almost 2 mln. in euros.
In the territory of Pieriga, the situation in the premium private house market has remained quite stable in the first half of the year. In the last six years, three private houses were purchased in Pieriga in the first half of the year (the exception was 2019, when six houses were purchased). In the first half of this year, five premium private houses were purchased in Pieriga for the total amount of 2.5 million. euros, which is two houses more than in the first half of last year, and in terms of total money it is 1.2 mln. euro growth.
Contrary to the growth rates of Riga and Pieriga, the turnover in Jūrmala has decreased by two-fifths, although in terms of the number of houses this half-year activity was identical to a year ago: 14 premium private houses were sold. At the beginning of this year, the total value of newly acquired properties in the historically largest Latvian market of premium private houses reached 8.8 million. euro. Last year, the value of houses sold with an equivalent number was 6.3 million lats. euro higher.
It should be noted, however, that the beginning of 2020 in the resort town was one of the fastest since 2014: only in the first six months of 2018, 14 houses were sold. At the beginning of this year, the average transaction price of private houses purchased in Jūrmala was 629,000 euros, which means that purchases of premium private houses in the resort town were a total of 453,100 euros cheaper, as last year such private houses could be purchased for an average of 1.1 million euros.
The average price of private houses purchased in Jūrmala this semester is the lowest during the last ten semesters. The biggest drop is observed in the group of the most exclusive houses: this year only two private houses were purchased at a price of over one million euros – a total of 2.3 million euros. euro. Compared to the first half of 2020, then seven buyers acquired such dwellings, the total value of which reached 11.5 million. euro. Analyzing the data over a longer period of time, it must be concluded that the market of premium private houses in Jurmala is relatively volatile. Therefore, what was observed at the beginning of this year is not unambiguous.
Premium building land accounted for 2.9% of the total high-end real estate market in the first half of this year. Land transactions for construction in the price range above 150,000 euros are still not common. In January-June 2021, a total of 11 land properties were purchased in the three reporting regions, the total value of which reached 2.9 million. euro. It was by 1.3 mln. euros less than in the corresponding period a year ago, when six buyers invested 4.2 mln. euro.
This year, buyers have found the most plots of land that meet their wishes in Riga – seven plots of land were purchased for 1.7 million. euro. Purchased three plots of land in Jurmala for 660 thousand. euros significantly lags behind what was achieved in the first half of last year, when five plots of land in the resort town were purchased for 3.8 mln. euros, a couple of which were truly exclusive plots of land. In Pieriga, only one plot of land worth almost three Jurmala properties has found its buyer – for 550 thousand. euro.
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