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Apartments in the centre of Riga

The accommodation in the centre can be divided into 3 different groups of prestige and price: the Old Riga, the quiet Centre including the port district and the district of embassies, which starts from the Kr. Valdemara street and ends with Malpils street and which includes itself the Tomson,Zaubes, Niitaures, Vesetas, Hanzas, Sporta, Strelnieku, Alunana and Alberta streets and the third group is historical or "noisy-active" centre, which borders with A.Chaka street, VEF bridge and Kr. Valdemara Street.

In spring there was a very big demand for the properties in centre of Riga. But offer was minimal: the potential sellers were waiting for the 1^st of May, hoping for the gradual increase of the costs. Prognoses appeared to be correct.

The prices for the accommodation in Riga are influenced by the technical condition of the buildings. The costs of flats at the beginning of 2004 ranged from 1200 EUR per square meter for non-refurbished flats till 2500 EUR per square meter for refurbished ones.

The technical condition of stairs and the quality of refurbishment also influence the costs of accommodation. E.g. flat in the non-refurbished house with non-renovated façade, not-renovated stairs coasted till 1500 EUR per square meter. In its turn, at the end of the year the prices for the flats in Old Riga were more expensive than 5000 EUR for square meter.

In the "quiet centre" the price for the flat without internal refurbishment at the beginning of 2004 ranged from 800 till 1900 EUR per square meter, at the end of the year from 1200 till 3500 EUR per square meter. The average growth of the price per year is 50%-85%.

For the refurbished flats the price is higher - at the beginning of the year from 1200 till 2000 EUR per square meter, but at the end of 2004 already from 1500 till 4200 EUR per square meter. The increase of the prices for the best apartments sometimes is twice as bi in comparison with the last year, 2003.

The historical or "active" Centre lies on the territory from Valdemara to Chaka street, including Tallinas, Brivibas, Stabu, Barona, Elizabetes, and Lachplesha streets. From the direction of Tallinas Street to the very centre the prices range from 560 EUR per square meter, at the end of 2004 - 800 EUR per square meter. In its turn, closely to the Old Riga, for example, on the Raina Boulevard the price of apartments ranges from 1200 till 4000 EUR per square meter. The price for the best apartments increased for the 100%.

In the Riga suburbs of Latgale, between the Chaka and Valmiera streets, around the region of the Central railway terminal, Gogolja street, Sadovnikova, Lomonosova, Lachplesha and the end of Dzirnavu street - at the beginning of 2004 the prices ranged from 480 EUR per sq.m. starting with Valmieras str till 1200 EUR/sq.m. closer to Chaka street. But at the end of 2004 the flats coasted from 600 till 1500 EUR per sq.m. In average the price has grown to 25%.

In the district of Port, from Hansas street till Lugazu street, including Katrinas street, Katrinas dike, Petersalas, Aluksnes, Mastu, Exporta streets the prices for apartments at the beginning of the year were from 600 till 650 EUR per sq.m., maximal prices till 1200-1600 EUR per sq.m., at the end of 2004 prices varied from 1400 till 2200 EUR per square meter. In average the price had grown for 25%. Prices during the year grew from 25% till 100%. The following growth of prices in accordance with prognoses will not be so rapid, in average 10-20% per year.

In spring the renters of the houses became very worried in connection with the new law project which would allow the owners of the houses to ask for any rent they will consider being appropriate. The renters started to look for the crediting variants, especially for the 100% crediting possibilities. Nevertheless the Government is not going to accept this law yet, so the investors are not very optimistic and keen to invest into houses, which have long-term contracts with tenants.

Approximately 85-90% of deals in the segment of expensive properties are arranged wit the help of crediting that increase the level of the risk for customer: in case of changing loan rates, that at the moment are quite low, the pat of credit takers will not be able to pay monthly payments. That is why many flats in the centre can be potentially sold for the second time. At the moment the increase of capital is 10-15% per year. The credit risks are increased because of the fact properties are bought for the speculative deals (property is bought for the further selling or rent). The quantity of such speculative deals in the center is 50-60% and there is a big competence between landlords that means that in 2 years the biggest part of properties that at the moment are offered to rent will be sold.