Last year in Latvia, among housing loan recipients, the most common choice was a compact three-room apartment in a 602-series house.
There has also been a high interest in serial housing on the secondary market. At the same time, the demand for housing in the suburbs of Riga and in new projects is becoming more noticeable.
Borrowers most often chose three-room apartments with an area of about 60 square meters in 602-series houses. Overall, residents of Latvia, with the support of banks, are increasingly purchasing real estate on the secondary market. Apartments in serial houses accounted for 31% of all transactions. Housing in new projects accounted for 27% of transactions, while one in four borrowers opted for the purchase or construction of a private house.
Serial apartments in Soviet-era buildings are likely to remain popular in the coming years, as for many buyers, this is the most affordable segment of housing. At the same time, interest in new projects continues to grow, and the volume of transactions in this segment has already approached the number of transactions with serial apartments.
Additionally, banks have observed an increase in demand for renovated apartments. This may be related to the fact that the cost of renovations has significantly increased, and the work itself takes time. According to bank estimates, the price difference between a renovated and an unrenovated apartment can reach 20%.
The majority of housing loans in Latvia are still issued for the purchase of real estate in Riga, where 56% of all transactions occur. At the same time, there is a noticeable trend of moving to the suburbs of Riga — 23% of housing was purchased there with bank financing. The most sought-after areas are Marupe, Ropazi, and Kekava. Activity in the center of Riga remains moderate.
In the regions, just over one-fifth of all housing loans were issued. The greatest interest in real estate was observed in Liepaja, Jelgava, Valmiera, Ogre, Sigulda, and Jurmala.
The bank also notes that requirements for energy efficiency and the size of utility costs are becoming increasingly important for buyers. In the long term, this may enhance interest in renovated and better-maintained serial houses. However, in practice, the final decision to purchase is still most often determined by financial capabilities.
According to survey data, 27% of residents of Latvia consider high real estate prices to be the main obstacle to purchasing housing. The second most significant obstacle is the lack of savings for a down payment.
Leave a comment