The construction and real estate sector has long been a key driver of the domestic economy; at the same time, it has accumulated a variety of problems. Last week, the issue was addressed by the Saeima Commission on Long-Term Development, led by Ugis Mitrevics (National Alliance).
Riga Dominates, but Not Absolutely
In 2025, the number of newly issued building permits for residential buildings was 2,286, slightly exceeding the levels of 2024 (2,174) and 2023 (1,953), but still falling short of the 2021 figure (2,444). At that time, during the corona crisis, "helicopter" money contributed to a construction boom, driving up prices for building materials and labor, which subsequently led to a decline and stagnation.
The current growth can be considered relatively stable and geographically balanced. While Riga distinctly led in 2020 with 64% of the houses being built, its share had decreased to only 52% after five years. The biggest leap was made by the Vidzeme statistical region, increasing its share from 6% to 15%; Zemgale also looks strong, growing from 11% to 15%; Kurzeme maintained its positions at 11% and 12%; whereas Latgale is experiencing stagnation at 7% and 6%. This is not surprising, considering the unfavorable information background regarding the Eastern border...
Meanwhile, it should be noted that real estate in Vidzeme is largely tied to the so-called Pririga – in the area from Jūrmala to Ulbroka and from Saulkrasti to Kekava.
Apartments on Credit
The increase in the number of issued mortgage loans is noteworthy – according to the Bank of Latvia, from 2022 to 2025, their number rose from 16,522 to 22,526, i.e., by more than 36%. This may also serve as an indicator of the stabilization of the macroeconomic situation – as only the availability of well-paid jobs allows for borrowing.
Another point of pride for the Ministry of Economics is the number of young families with children who received support in the form of guarantees for the purchase or construction of housing – with a planned level of 25,300, there were already 30,486 counted.
In this situation, however, the secondary market is also stimulated; moreover, it is impossible to draw conclusions about the final result – how many apartments and houses were purchased with grant money...
Striving for Individuality
According to the Ministry of Economics, as of February 2026, there were 11,993 new private houses under construction in Latvia; 316 houses with 2 apartments; 193 houses with 3 or more apartments.
Last year, the maximum number of private houses since 2020 was put into operation – 1,279 in the Riga planning region and 1,017 in other regions of the republic. For comparison, in 2021, 544 cottages were built in Riga, and only 310 in the provinces.
However, the number of apartments built in multi-story buildings saw a decline – in 2025, only 1,258 housing units were completed in Riga. In all previous years, this figure dropped below 1,900 only once – in 2023.
On the other hand, it is noteworthy that there was an almost threefold increase in multifamily housing in the provinces – 335 apartments were received, which is comparable to the total volume for 2020-2024 (371).
Tens of Millions to Social Housing
This amount (82.6 million euros) is co-financed by the municipalities of Latvia and the European Regional Development Fund (ERAF), and it is planned to be spent on the restoration of the housing stock owned by municipalities and the construction of new buildings. Thus, it can be predicted that by the end of the program on December 31, 2029, the number of renovated and newly built multi-story buildings in the country will increase.
This will allow, according to the plan of the ministry led by Viktors Valainis (Union of Greens and Farmers), to provide social housing for 1,952 families. It is planned to deliver in Riga – 837 apartments, in Kurzeme – 424, in Vidzeme – 331, in Latgale – 254, in Zemgale – 119.
At the same time, the program for the construction of municipal housing with low rent continues. Thanks to 14 loan agreements, 1,020 apartments are being built, with 356 already completed. The planned result over two years is expected to exceed all built in the regions of Latvia over the past fifteen years by 1.5 times!
So far, Liepaja (258 apartments) and Jelgava (234) are clearly leading, with Northern Vidzeme – Valmiera region (120 apartments) also well represented. The total available funding along this line is 124.38 million euros.
Construction Roller Coaster
The public-private partnership program, financed by the European Investment Bank, is estimated at about 230 million euros and is designed for the construction of 1,290 apartments in 6 municipalities by 2030. The housing is intended for young professionals, throughout Latvia, from Riga (732) to Gulbene region (48).
– Equally across the territory of the state, – emphasized U. Mitirevics at the commission meeting. The former mayor of Sigulda himself highlighted the role of municipalities in attracting funds.
Martins Auders, director of the Housing Policy Department of the Ministry of Economics, acknowledged that construction in the country is going "like on a roller coaster" – influenced by both the war and fluctuations in interest rates. In any case, the foundation is "households that can afford to take out a loan."
FINANCIAL DIFFICULTIES
Two-thirds (66.8%) of households in Latvia have some degree of difficulty with expenses arising from their housing – from loan repayments to utility payments.
