According to Latio, the average Riga apartment price in December 2007 was 1415 Euros/m2. This was 2.1% less than in November 200 and 17.8% less than in April 2007 (when the prices peaked). Compared to December 2006, the prices have declined by 7.3%.
So, Riga real estate is firmly on the downward trend. If 7.3% or 17.8% looks like a big decline, one should remember that it comes after a much bigger multi-year rise in apartment prices, to the degree that they became unaffordable to most Latvians.
For example, from December 2005 to December 2006, also according to Latio, the apartment prices increased by 69% (in one year!). Even combined with this year's decline in prices, we still have a 57% increase from December 2005 to December 2007, which is a lot.
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2 comments:
I take it the 7% yoy decline is in nominal terms and the real decline is over 20% (adding 13%+ annual inflation). To me that's quite a substantial drop in such a short period of time. With real-estate in developed countries prices rarely fall in nominal terms, they stagnate as inflation accelarates, eating away at house values.
Am I the only one who thinks that a slowdown in the Riga housing market will be beneficial to the economy? I purchased a flat in Riga 2 years ago and had to wait for 3 months to find builders for a minor job... Flipping apartments for a living had become a desirable aspiration.
Surely the future of the Latvian economy lies in its ability to compete in the knowledge economy, for instance as a Baltic hub or as a EU springboard to Russia, not to channel a entire generation of young Latvians into quick-buck speculation!
Maybe this will entice Latvians abroad to go back to Riga, especially as the economic situation deteriorates in the UK.
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