Riga and its neighborhoods traditionally account for more than half of all purchase and sale transactions in the country, although due to the epidemiological situation the demand for housing in the province has increased too (in Zemgale and Vidzeme, sales increased 5-6% in the six months of 2020).
According to the results of the first half of 2020, there is a slight drop in interest in the capital of Latvia. If in 2018-2019 for the same period the number of transactions in the capital city was 7.0–7.6 thousand, now it is 6.1 thousand. This is a good result, considering that during the period of the emergency regime (April – June), sales in Riga fell from 1.1 thousand transactions per month to 700. By the beginning of autumn, the indicator returned to normal one thousand transactions, according to the State Land Service (Zemesgrāmata).
For a stable real estate market in Latvia, the figures are not critical, since the reason for the decline was not bubbles or high debt load of buyers. According to experts, in some cases, the demand for real estate is only growing, as it happened with the project Centrus.
Alexey Shvets, Sales Manager of Centrus Real One: Covid-19 helped Riga a lot, so to speak. Latvia is now one of the safest places in Europe, and the demand for real estate in the capital has increased significantly. The number of showcases for our project has increased at least twice (compared to what was before the pandemic). At the moment, we really see a high demand from both local and foreign investors from Europe, Russia and the CIS, who are looking for both residences for personal purposes and housing for rent.
If in 2019 the stock markets of different countries added 15% to 30%, the main indexes in 2020 are declining in anticipation of the second wave of the epidemic, and financial injections to support the economy only restrain the downward trend. The conditions on the stock exchanges are not very favorable for investors. Many people transfer capital to more stable instruments like bonds, gold, real estate.
It is a far-sighted decision to diversify your investment portfolio in favor of assets with reduced or zero risk. Almost always in unstable times investors invest in real assets. For example, in the real estate of the country where it is quiet and there are fewer cases, and the standard of living is high. From this point of view, real estate in Riga is a good choice.
Alexey Shvets, Sales Manager of Centrus Real One: Over the past month I have had several clients who have withdrawn their finances from exchange-traded instruments and consider investing in real estate. Here Latvia, of course, is not the leader, but it is possible to earn up to 6-8% per annum from renting. We are talking not only about commercial properties, but also residential ones that are easy to manage and less dependent on economic and political business risks.
The main interest of the buyer in Riga is focused on housing in the price segment up to €100,000. If you select a property in the city center, it will often be renovation projects. For this money you can buy an apartment with an area of 30-50 sq.m. Unfortunately, most properties are transformed from the outside and inside, but communications and load-bearing structures remain unchanged. This increases the risk of possible problems and serious capital investments of future residents.
In recent years, interest in secondary market and old housing stock in Riga has fallen markedly. Therefore, the investor should pay attention to new buildings, the price level of which is the most stable on the market. Apartments in the districts of Zolitude, Plavnieki, Agenskalns and Mezciems are in the highest demand of buyers and tenants. The most popular square footage is 35, 55 and 75 squares.
Alexey Shvets, Sales Manager of Centrus Real One: Foreign investment in Latvia is concentrated only in Riga and Jurmala. Purchases for rent are the main request. Condominiums up to €5 million with tenants are also in demand (this is a classic investment in Riga). Trends in development remain: mainly residential areas designed for a local buyer. There are enough projects that meet the investor's requirements in the center of Riga, both already implemented and under construction.
The center of Riga is a neighborhood where demand is high, regardless of external circumstances. The Centrus Project at 81 Dzirnavu street is no exception. On the one hand, apartments with terraces, panoramic windows and views of the historical quarter are perfect for investment, on the other hand, it fits for moving and obtaining a Latvian residence permit. Within walking distance of the complex are the Verman garden, the Latvian National Opera, the Esplanade, and the Old Town. The entire infrastructure of the city center o is at hand.
In addition to a good location and a beautiful view from the windows, Centrus is a ‘green’ building with perfect sound insulation. A special award in the “Annual Award in Riga Architecture-2016” in the category "For Audible Silence" confirms this. When the European capital is noisy behind the walls, freedom from the sounds of the big city becomes especially valuable, and the opportunity to retire is worth everything.
Alexey Shvets, Sales Manager of Centrus Real One: New owners get a comfortable and high-quality apartment in the center of the capital, which allows them to enjoy a quiet private life and all the advantages of a prestigious location.
The high energy efficiency of the project is due to improved thermal insulation, high-quality facade finishing (white concrete and copper), as well as the ‘smart home’ system, which allows you to monitor utility costs in real time, configure systems for individual requests through an electronic control system.
There are no questions about security systems either. The courtyard without cars, video surveillance, concierge service, adjustable environment for people with disabilities and playgrounds with a special coating, all these things are available for the residents.
The apartments are fully ready for the tenant or new owner to move in. In addition to finishing in three colors, you can choose from a furniture service from the developer. There are also city storage boxes, spacious terraces, underground parking and a promenade connecting Dzirnavu and Blaumana streets, an individual training Studio Core Terapija. A whole package of privileges of an elite residential complex.
Apartments in two seven-storey buildings are available for purchase in Centrus. The area of apartments varies from 47 to 118 sq. m. Prices correspond to the average market indicators, and the developer offers installments, favorable conditions for mortgage lending and assistance in the process of obtaining a residence permit. Favorable offers are available both for European and non-EU citizens.
Alexey Shvets, Sales Manager of Centrus Real One: The cost of properties corresponds to the average prices for housing of this level: €2.9-3.8 thousand per square meter (fully finished). We are willing to accept short-term installments, and there is also a special offer from a partner bank: a mortgage for 80% of the apartment price for up to 20 years, an interest rate of 5-6%. The loan is available even to non-EU residents, which is unique, since all other banks enter into a contract only if the borrower has income in Latvia.
We help clients who are interested in obtaining a residence permit with the preparation of documents. This year we had three clients with this request.
The profit from deposits in commercial banks in Europe is low, about 1%. Against that investments in concrete gold win even with 3-4% of net income.
In the current situation, we are not talking about investments in the commercial real estate segment: as a result of the pandemic, many industries have been affected, including logistics, transport, manufacturing, and forestry. Their representatives appeal to the owners of premises with a request to reduce the rental rate. Small and medium-sized businesses realized that remote work is profitable without expensive office rentals. Residential real estate remains for reliable and safe investments.
In Centrus, the return on investment will be slightly higher than the market average, about 5-6% per annum. Plus, maintenance and maintenance costs are low: the owner pays €1 per sq.m of living space. On average, this figure is higher in Riga – €1.5-2 euros.
Alexey Shvets, Sales Manager of Centrus Real One: Commercial real estate is at risk, especially offices, as many people started to work remotely. But rental housing has remained at the same level. Many people postpone the purchase, wait for the best prices and continue to withdraw.
In our project, even during the pandemic, apartment owners found a tenant in just a month. We rent two-room apartments for €800-850 per month plus housing and utilities, and three-room apartments for €1,200-1,400. In this scenario, the investor's income will be 5-6% per annum. Now all the investment objects of the quarter have been commissioned.
Contact the company for more details:
68 K-2 Dzirnavu Street, Riga, Latvia
http://www.centrus.lv/
aleksejs.sveics@centrus.lv
+371 26564560