Residential real estate
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Residential real estate is a type of real estate designed for living, as opposed to working, manufacturing or providing services. Residential property is generally divided into private houses and multifamily residentials. Private houses are single-unit buildings designed to accommodate a single person or a group of people who share the whole space of the house. Multifamily residentials are multi-unit buildings designed for a number of people or groups of people, where each person/group of people occupies one unit and does not share units with other people/groups of people.
It should be noted that these definitions are based on the intention, i.e. the initial main idea, with which residential property is constructed. Naturally, a private house can be divided into separate units by its residents, and one person can own multiple units in a mulitfamily apartment complex, but that does not change the type of estate.
The two primary ways of obtaining a residential estate are buying and renting it. In the EU, 70.5% of residents are full owners of their property, while the remaining 29.5% are renting it out. Out of all owners, about 39% are paying a mortgage loan, while 61% have no active mortgage.
Residential estate in Latvia
As of 2017, Latvian residential real estate market is in its growing phase. On average, the prices for real estate grew by 9.75% in the last year, while demand also increased by 10.5%. This is all despite the fact that the economy only grew by 0.8% in the same period, which allows predicting the continuation of this growth in the nearest future. Two other factors that may have contributed to this growth are declining mortgage interest rates, which make applying for a loan easier, and the introduction of the Mortgage Loan Programme in 2015, which allows applying for mortgage with state-issued guarantees.
In 2009, there was a drop in supply of residential real estate, meaning that fewer houses and apartment complexes were built. Many of the projects started at that time were subsequently frozen and are only now returning to activity. Some of them are still being completed. I general, the housing supply is recovering slowly, but steadily - around 2 500 new units are being completed annually, which is a growth of about 20% from the previous periods. Despite that, it is still far from the pre-2009 peak of 9 000.
Prices for Latvian residential real estate can vary significantly, depending on the location. Below, you will find a summary for some of the major cities and for the whole country on average.
|Latvia||1 bedroom apartment||City centre||341 EUR|
|Outside the city centre||249 EUR|
|3 bedroom apartment||City centre||597 EUR|
|Outside the city centre||417 EUR|
|Riga||1 bedroom apartment||City centre||382 EUR|
|Outside the city centre||273 EUR|
|3 bedroom apartment||City centre||674 EUR|
|Outside the city centre||458 EUR|
|Daugavpils||1 bedroom apartment||City centre||115 EUR|
|Outside the city centre||100 EUR|
|3 bedroom apartment||City centre||200 EUR|
|Outside the city centre||166 EUR|
|Liepaja||1 bedroom apartment||City centre||190 EUR|
|Outside the city centre||140 EUR|
|3 bedroom apartment||City centre||324 EUR|
|Outside the city centre||216 EUR|
|Valmiera||1 bedroom apartment||City centre||200 EUR|
|Outside the city centre||163 EUR|
|3 bedroom apartment||City centre||300 EUR|
|Outside the city centre||225 EUR|
|Jelgava||1 bedroom apartment||City centre||285 EUR|
|Outside the city centre||190 EUR|
|3 bedroom apartment||City centre||350 EUR|
|Outside the city centre||270 EUR|
|Latvia||Apartment in the city centre||1 636 EUR|
|Apartment outside the city centre||1 015 EUR|
|Riga||Apartment in the city centre||1 804 EUR|
|Apartment outside the city centre||1 109 EUR|
|Daugavpils||Apartment in the city centre||666 EUR|
|Apartment outside the city centre||476 EUR|
|Liepaja||Apartment in the city centre||1 000 EUR|
|Apartment outside the city centre||550 EUR|
|Valmiera||Apartment in the city centre||500 EUR|
|Apartment outside the city centre||588 EUR|
Tenure status and household type
Statistical data shows, that 80.6% of Latvians are the owners of their residence, while 19.1% are tenants, meaning they rent their residences out. Out of all the owners, 12.3% have an outstanding mortgage, while the remaining 80.4% do not have to pay out any real estate loans. It is worthy of noting that since 2009 the number of owners is decreasing, and, accordingly, the number of tenants is increasing.
As for the household type, 26.7% of residents live in a private house, 2.7% - in a part of a private house or in a multi-unit private house, 70.5% - in an apartment, and 0.1% - in another type of residence.
Immigration via real estate
Latvian real estate plays an important role in attracting foreign residents into the country. In 2010 an immigration programme has been launched, and it allows foreign nationals to purchase real estate in Latvia and receive a temporary residence permit on this basis. Property purchased for this purpose must cost no less than 250 000 EUR with a cadastral value of no less than 80 000 EUR. This purchase can be divided into two properties, both costing 250 000 in total,with the cadastral value of each no less than 40 000 EUR.