In the first half of this year, 611 transactions were concluded in the premium housing market in Latvia, 137 transactions more than in the first six months of last year.
This is confirmed by the real estate company in the premium segment Latvia Sotheby’s International Realty the research conducted on transaction activity in the first six months of 2022 in the three regions examined and in three segments of the premium real estate market: apartments, private houses and building plots in Riga, Jurmala and Pieriga.
Together with the number of transactions, their turnover grew accordingly: in the period January-June of this year 154.6 million euros were invested in premium accommodation, but the number of transactions in the more exclusive market segment with a value of apartments over 1 million euro is still relatively small: only 5 transactions were carried out.
The data collection examines information on premium real estate transactions, i.e. over 150,000 euros for apartments and building plots and over 350,000 euros for private homes.
Continuing the comparison with the first half of last year, the demand for premium housing in the Latvian capital increased by 11.7%, equal to 9.9 million euros. Interestingly, the number of homes purchased increased faster than their total value. This year, the interest of buyers in the vicinity of Riga proved to be more persistent than elsewhere.
99 premium properties welcomed the new owners in the Pieriga area this year. 76 properties were purchased in the € 150,000 to € 300,000 segment and 18 in the € 300,000 to € 500,000 segment. Only five were purchased above € 500,000, but in the most exclusive price range not a single property was sold above € 1 million. For all transactions, € 24.6 million was issued.
The dynamics of demand are particularly impressive, comparing the first half of this year with the corresponding period of last year, when 47 purchases were signed, for a turnover of 11.1 million euros. This means that the assets in circulation in Pieriga’s premium real estate market have more than doubled.
There is a growing difference between the regions reviewed in the apartment market
In all three regions under examination, 555 apartment sales were concluded between January and June of this year, the total value of which reached € 124.0 million. The Latvian premium apartment market has not seen such activity since 2014. Also, if this trend continues, this year will prove even more impressive. This is particularly indicated by the comparison of this year’s market activity indicators with the first six months of last year, when 416 apartments were purchased for € 101.4 million. Respectively, the year 2022 attracted 22.4% or 22.7 million euros more in investments, which allowed market participants to conclude 139 more transactions compared to the corresponding period of the previous year.
Riga apartments – the driving force of the premium market
In the first half of this year, 402 apartments were purchased in Riga for a total value of 90.3 million euros, a sharp increase compared to the first half of last year, since in the first six months 307 transactions were concluded for a value of 74.7 million euros compared to last year (respectively 30.9% and 20.8% year-on-year increase). Looking at the distribution of transactions by price groups, the dynamics of demand between the groups differs considerably. This year, 341 transactions have already been concluded in the price range of 150,000-300,000 euros, for a total of 64.8 million euros, 37.1% more than the 47.3 million traded in the first six months of last year. . EUR.
In the € 300,000-500,000 price range, demand still remains surprisingly stable, with 51 properties sold and over the last five semesters – € 2.1 million more than in early 2021.
In the market segment of the most exclusive apartments (over 500,000 euros), 10 transactions were concluded in Riga for a total of 6.5 million euros in the period January-June this year, but again no ownership was sold in transactions over € 1 million.
The average transaction price of an apartment in Riga this year. at the beginning it was 225,000 euros.
In Pierīga’s premium apartments market, the year 2022 started with an even wider reach than last year
In the second half of last year, the capital’s neighboring territories hit a new record in apartment sales, and demand remained in January-June this year, reinforcing the likelihood that the jump is even greater in the second half of last year. this year. This year, 74 owners have already received the keys to the new premium apartments, paying a total of 13.8 million euros for them. This is – 114% more than 6.4 million in the first six months of last year.
Also in the tourist resort of Jūrmala, this year 79 owners bought new premium apartments, spending a total of 19.9 million euros, of which 59 were worth 150,000-300,000 euros, 19 apartments were worth 300,000-500,000 euros and only one apartment exceeded the 500,000 euros.
The dynamics of the Jūrmala apartment market is significantly different from that of Riga and Pierīga, as a slight decrease of 300,000 euros is observed compared to the first half of 2021, for a total of 19.9 million euros. In addition to the total demand, the size of transactions has also changed: the average price of an apartment this year in January-June was 240,000 euros, but the average area of the residential premises was 144 square meters (an increase of 14.0% compared to to the 127 square meters of apartments purchased at the end of last year). The demand for apartments in new projects is growing in all regions. Of the 402 premium apartments purchased in Riga, 287 are located in the new projects. Only 11 of the 79 premium apartments purchased in Jurmala were not in the new projects. In the Pieriga territory, this proportion is very similar: 63 out of 74 transactions are the construction of new projects.
In the Latvian premium private home market, 41 homes were purchased this year for a total value of € 26.8 million in the regions under review. Five transactions were concluded in the capital for a value of 2.6 million euros (three private houses in the price range of 350,000-500,000 euros, two over 500,000 euros and none over 1 million euros). Each house cost an average of € 542,000, but an average of € 1,300 / m2 was issued for each square meter. In the first six months of 2021, the amount of transactions was 7.0 million euros.
In the Pierīga territory, in the premium private house market, 22 houses satisfied the new owners in the period January-June, for a total cost of 9.9 million euros (five private houses in the price range of 350,000-500,000 euros, four over 500,000 euros and five over one million euros). As a result, the first half of 2022 recorded an increase of 34.4% compared to the 7.4 million euros at the end of the year. The average price of the property rose slightly to 450,000 euros (2.9% from 436,000 euros in the months of July-December). The average land area of a private house reached 342 square meters, and the average price of one square meter this year dropped to 1,600 EUR / m2 (-7.5% down from 1,800 EUR / m2 at the end of the previous year. ).
In the Jurmala premium private homes market, 14 transactions were concluded for a value of 14.2 million euros, with an increase of 26.5% compared to the 11.2 million euros invested in January-June 2021. In general, each house costs an average of 1.0 million euros. However, it is precisely in the Jūrmala private house market that five transactions were carried out in this semester, which came from the most exclusive segment of the private house market of premium accommodation, whose value exceeded the 1 million euro threshold.
Premium building land: in the first half of 2022, 15 building properties were purchased in the three regions in question, with a total value of 3.7 million euros. In Riga and Jūrmala, six properties were purchased each (10 properties worth 150,000-300,000 euros, one in the Jurmala territory in the 300,000-500,000 euro segment and one in the Riga area in the over 500,000 euro segment), while in Pierīga only three families plan to build a new house in this price range (two from 150,000-300,000 euros and one from 300,000-500,000 euros). Properties for a value of 1.5 million euros were purchased in Riga, in Jurmala for 1.4 million euros, while properties for 830,000 euros were purchased in Pierīga.
Describing the current situation of the real estate market, Latvia Sotheby’s International Realty Owner and manager Ilze Mazurenko says: “Although we see that the number of transactions is high, they have become more local, the data we have shows that the current real estate market corresponds to the purchasing power of the local buyer. The volume of large transactions and buyers’ interest in transactions exceeding 2 million has been significantly reduced. This creates conditions in which sellers of properties in the higher price segment will have to wait for a buyer for a much longer period of time. “
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