Currently, only a little more than 300 completely finished apartments in the economic and middle class segment are available in the first-time market in Riga and Pierīga, according to real estate consulting companies Colliers June data.
This can be explained both by the slow development of new projects so far and by the still high demand for energy-efficient and sustainable housing.
Colliers data show that in May of this year, 170 new housing transactions were registered in the economy and middle class segment in the first-time market. This is 57% more than a month earlier, when 108 transactions were recorded. The high demand for energy-efficient housing has contributed to an even greater deficit in the segment of fully finished new apartments – currently only 280 middle-class apartments and 40 economy-class apartments are available on the first-time market. Compared to May, the number of finished apartments in the first-time market fell by 8%, when it was 1,080, but compared to the situation a year ago, the number of finished apartments decreased by 42%. True, these data are mostly about transactions for which reservations were made last year or at the beginning of this year.
At the same time, taking into account the increasing costs of construction, the unstable geopolitical situation in Europe and the lack of new housing, the number of reservations for apartments under construction significantly decreased in the second quarter of this year. If 381 apartments were reserved in the first quarter of the year, then in the second quarter the number of reservations in the economy and middle class segment decreased by 48%, reaching only 198 reservations. The average price for which apartments were booked in the second quarter was EUR 2,020 per square meter for economy class apartments and EUR 2,220 per square meter for middle class apartments.
“Including business and premium class housing, approximately 4,220 apartments are currently available on the first-time market, of which approximately 990 apartments are fully completed, while another 3,200 are under construction. In all segments, a total of 54% of apartments are currently reserved. Provided that the average sales rate of the last 12 months remains, the apartments currently available on the first-time market will be sold within 1.6 years. At the same time, we also see some caution on the part of buyers, which is reflected in the decrease in the number of reservations, which was mainly affected by the increase in the prices of new housing and the war in Ukraine,” says Agija Vērdiņa, associate director of Colliers’ research and consulting department.
Colliers data also outlines the situation in the top of the most sought-after housing developers. As in previous years, in the first five months of this year, housing developer “Bonava Latvija” retained its leading position in terms of sales revenue.
TOP 10 developers by sales revenue (January-May, 2022)
