RESIDENTIAL MARKET REPORT and Regional Cities

Quarter 4 2015 RESIDENTIAL MARKET TRENDS ° The year 2015 was full of difficult challenges for the real estate market and outlined the market shift towards domestic demand. Dynamics of apartment prices in Riga ° Already in 2014, macroeconomic processes generated a series 5 000 of events with far-reaching consequences: changes to the 4 500 Immigration Law and the fall in the value of the Russian rouble 4 000 reduced the non-residents’ interest in the Latvian real estate 3 500 market several-fold. Speaking of the segments focused on the 3 000 2 500 domestic demand, the confusion caused by the application of 2 000 EUR/sq m the “dropped-off keys” principle at the beginning of the year 1 500 ceased mortgage lending almost completely. 1 000 ° The figures for the second half-year show cautious optimism 500 0 that the market is able to adapt itself to the new circumstances. A particular example is the 18% increase of the activity on the 2006-I 2007-I 2008-I 2009-I 2010-I 2011-I 2012-I 2013-I 2014-I 2015-I 2005-III 2006-III 2007-III 2008-III 2009-III 2010-III 2011-III 2012-III 2013-III 2014-III 2015-III primary market of new housing during the year. Despite this Source: Land Register, Precast in boroughs New in boroughs fact, there were 12% less transactions in Riga housing market LATIO New in centre New near Old Town on the whole in 2015, while the total amount of transactions dropped 22%, with the market losing about EUR 80 million to 100 million according to Latio estimates. Dynamics of number of transactions with apartments in Riga and total amount in ° Despite the good performance in the primary market, the 2014 and 2015 by quarter market of apartments in new developments in terms of both 2 200 120 activity and the total amount decreased ca.30% in 2015, as the 2 000 secondary market experienced a substantial downturn. 1 800 100 1 600 80 ° The situation in Riga apartment market is well illustrated by the 1 400 apartment segment in the city centre: while the activity in the 1 200 60 Silent Centre, where transactions mostly involve exclusive and 1 000 non-resident-oriented properties, fell 56%, the drop in the 800 40 Remote Centre, which is more focused on domestic demand, 600

was less than 10% during the year. transactions Number of 400 20 ° In the second half-year, the market of precast apartments 200 0 0

returned to its enviably stable volume: about 400 transactions transactions,apt.amount Totalmillionof EUR 2014, I 2014, II 2014, III 2014, IV 2015, I 2015, II 2015, III 2015, IV per month for a total amount of ca.EUR 11 million. This is the Source: Land level which was common in 2014. Register, New developments Apartments in city centre LATIO Precast apartments Total amount of apt. transactions

2 Residential Market Report, Riga, 2015. LATIO Market Analysis Department. Data publication without a reference to the source is prohibited! Apartments in new housing development Solit ūdes parks NEW APARTMENTS MARKET ACTIVITY Number of transactions with new apartments in Riga and total amount ° Q4 2015 was marked by continued growth in activity 35 160 in the primary* market of the apartments in new 30 140 120 developments. During the year, this segment showed 25 100 activity increase of 18%, making 2015 a year of 20 growth. The volume of housing sold by developers 80 15 demonstrated at least a 20% increase for three 60 10 consecutive quarters in the market. 16,6 40 13,9 transactionsNumber of 11,2 12,3 13,0 11,7 12,4 12,4 5 8,3 20 ° Despite the good performance in the primary market, 8,0 8,0 7,8 0 0 the market of apartments in new developments, in mio. transactions,amount TotalEUR of Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Land Register, terms of both activity and the total amount, LATIO Total amount Transactions decreased about 30% on the whole in 2015, as the secondary market experienced a substantial Share of new housing in apartment downturn due to a rapid drop in the non-residents’ 60 market 500

demand: during the year, the number of transactions 50 in this segment decreased 53%. 400 40 ° Amendments of the Immigration Law and the 300 confusion caused by the application of the “dropped- 30 200 off keys” principle led to a 30% to 40% decrease in 20 100 the market volumes of the new developments in the 10 first three quarters of the year, whereas in the last transactionsNumber of 0 0 Total amount of transactions, mio. mio. transactions,amount TotalEUR of quarter of the year, the number of transactions Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec returned to the average level of 2014. New apts, amount Centre apts, amount Source: Land Register, Precast apts, amount New apts, number ° * the primary market of new housing is composed of properties sold by developers LATIO Centre apts, number Precast apts, number

3 Residential Market Report, Riga, 2015. LATIO Market Analysis Department. Data publication without a reference to the source is prohibited! ° The overall market of new developments demonstrated ° Due to strong demand in the last three quarters a growth of 13% in terms of the number of transactions of the year, the number of transactions in the as compared to Q3, yet there was a slight decrease primary market increased 18%, while the (6%) in terms of the amount. secondary market, which experienced a steep decline at the end of 2014 and beginning of ° In Q4, the share of the number of transactions with 2015, continued to stagnate for the third quarter apartments in new developments in Riga apartment in a row: the market activity decreased by half market increased slightly and reached 20%, while the during the year. total amount remained at the level of 47%, according to the Land Register data. ° The primary market of new developments is better adapted to the changing market ° Following the decline in market activity in Q1, which was environment and local demand, with people caused by the uncertainty regarding the application of buying homes mostly for themselves in order to the “dropped-off keys” principle, the number of live there and fine-tuning the layout and finishing transactions in the last months of the year increased materials according to their wishes. 51%, and the total amount grew 59%. ° The share of non-residents since mid-2014 in ° The most sought-after apartments in the new the segment of new developments fell from over developments have an average area of 70 to 75 square 60% to 20-25%. It took the market players a metres and most transactions are concluded for the year and a half to adapt themselves to the new amounts of 80 to 90 thousand euros. During the year, circumstances, by making price adjustments the number of transactions with apartments of up to 75 and sometimes even shifting the business sq m showed a slower decrease of 10% to 12%, and the model to rental apartments. decrease for larger apartments ranged between 30% and 50% during the year.

Information available to Latio regarding new apartment buildings, which are expected to be put into operation

Number of Approximate Address Name Developer Borough apts. price, EUR/sq m

Elizabetes iela 18 Elizabetes Apartamenti Transit Tandem SIA City Centre 21 6,000

Saktasiela 24 Saktas Nams Private investors 10 1,400

Pupu ķu iela 9, 11 Priedes YITCeltniec ība Valdlau či 79 1,350

Bitera iela 6 Art Terra 21 2,000

Valkas iela 4 CCDU Baltic SIA City Centre 10 5,000

Lapsas iela 12 NCCHousing Dārzciems 46

Pr ūšu iela NCC Housing Ķengarags 69

Klij ānu iela 2f KL2 SIA Remote Centre 48 1,400

Grostonasiela 12 Skanstes Parks MerksSIA 52 2,300 –2,600

Og ļu iela 30 BIIG SIA Ķī psala 7 3,000 –3,200

Slokas iela 31 Slokas31SIA Near Pārdaugava 24 1,900

Jūrmalas gatve 82 Eke Imanta 1,200 – 1,400

Antonijas iela 21 Magdel ēnas nami City Centre 119

Elizabetes iela 4 DekartaProperties City Centre 12

4 Residential Market Report, Riga, 2015. LATIO Market Analysis Department. Data publication without a reference to the source is prohibited! Apartments in new development Bi ķerziedi

Information available to Latio regarding new apartment buildings in Riga and Jūrmala put into operation in 2015 Number Approximate Address Name Developer Borough of apts. price, EUR/sq m

Ropažu iela 12 Jaun ā Teika Jaun ā Teika SIA Teika 100 1,500

Stendes iela 5 Domino YIT Celtniec ība SIA Šamp ēteris 51 1,520

A.Birznieka-Up īša 13 Felicity Apartments Domuss SIA City Centre 95 2,600 Bi ķernieku iela 16 Bi ķerziedi (House 5) YIT Celtniec ība SIA Teika 65 1,600 Miera iela 57a Miera Park House Pillar Holding Company, KS City Centre 38 From 1,700 Bazn īcas iela 18a Club Central Residence Kappa Capital SIA City Centre 20 4,000 Dzintaru prospekts 26 Park Apartments Dzintari, J ūrmala 27 House for rent Turaidas iela 17 Turaidas kvart āls MC Turaida Property SIA Dzintari, J ūrmala 121 Elizabetes iela 39 Tal Residence E-39 SIA City Centre 30 4,600 Elizabetes iela 22 Elizabetes Residence Enkom Capital SIA City Centre 48 2,600 Rembates iela 8 R8 Apartments VITRUM MT SIA Pļavnieki 73 1,200 Kazarmu iela 3 Solea Residence Aura Estates SIA City Centre 24 1,800 Putnu iela 31 NCC Housing 60 1,250 Grostonas iela 21 Skanstes m ājas Merks SIA Skanste 124 2,000 Bi ķernieku iela 160 NCC Housing Mežciems 60 1,400 – 1,500 Blauma ņa iela 20 Centrus City Centre 82

Str ēlnieku iela 7 Alfa Property Group City Centre 51 5,000 Antonijas iela 26 La Melodie City Centre 42 3,500

Dzintaru prospekts 42/1 Jūrmala 14 4,000

Ceri ņu iela 3 Ash Property Jūrmala 11 5,000 Skolas iela 20 Ash Property City Centre 36 2,500 – 3,200

Br īvības iela 46 Br īvības 46 SIA City Centre 17 3,500

Kado Karim Jūrmala 21

Vien ības prospekts 43 Admir āļ u Osta Jūrmala 45

Kāpu iela 40 Jūrmala 7

Te ātra iela 27 Jūrmala 4

5 Residential Market Report, Riga, 2015. LATIO Market Analysis Department. Data publication without a reference to the source is prohibited! PRICES Range of prices per apartment square meter in most typical new developments in Riga ° According to Latio information on transactions, Q4 8 000 demonstrated the continued stabilization of prices in 7 000 new developments, allowing for an assumption that 6 000 the prices have reached the bottom, and they are likely 5 000 4 000 expected to show a slow, economically justified 3 000 increase in the future. EUR/sq m 2 000 SUPPLY 1 000 0 ° Approximately 1,200 apartments were put into Oct Nov Dec Latio Oct Nov Dec Latio Oct Nov Dec Latio operation in Riga and Jūrmala in 2015, which will be Residential boroughs City centre Luxury Source: Land Register, supplemented by at least 600 to 800 apartments this LATIO year. ° Despite the positive trends in the primary market in Number of transactions with new apartments in primary and secondary markets in Riga the second half-year, excess supply is expected in the near future, so developers are currently taking a 100 90 wait-and-see position as far as the implementation of 80 new projects is concerned. 70 60 50 FORECASTS 40 ° The market of new apartments is gradually 30 recovering from the turmoil faced in in the end of 20 10 2014 and beginning of 2015, however, the players transactionsNumber of 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec are conservative and cautious because the market Source: Land Register, currently lacks the funding for the first instalment LATIO Primary market Secondary market required for the purchase. Share of number and amount of non- What is the focus of buyers’ attention? residents’ transactions in market of new apartments ° The dominant selection factor is still the price, which is 50% becoming more affordable to buyers in regard to the 45% 40% housing developments oriented towards the domestic 35% demand, as evidenced by the increased number of 30% 25% transactions in the primary market. 20% 15% ° The most sought-after apartments are those with 2 and 10% 3 rooms. Choosing between the apartments of similar 5% 0% size and quality, the buyers most often give priority to Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec the apartments with more rooms, even though they Source: Land Register, LATIO Share of number of transactions may be smaller . Share of amount of transactions

Breakdown of number of transactions with Breakdown of number of transactions with new apartments in Riga by price category new apartments in Riga by floor area 150 150

125 125

100 100

75 75

50 50 25 25 Number transactionsNumber of

0 transactionsNumber of Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Land Register, Source: Land Register, < 50 sq m 50 - 75 sq m 75 - 100 sq m > 100 sq m LATIO < EUR 50,000 EUR 50,000 - 100,000 EUR 100,000 - 150,000 > EUR 150,000 LATIO

6 Residential Market Report, Riga, 2015. LATIO Market Analysis Department. Data publication without a reference to the source is prohibited! www.latio.lv – several thousand apartments offered

PRECAST APARTMENTS

MARKET ACTIVITY Number of transactions with precast ° In 2015, the market of precast apartments in Riga was apartments in Riga and total amount least affected by the amendments of the Immigration 16 500 Law and the confusion caused by the application of the 450 14 “dropped-off keys” principle, although on the whole the 400 350 12 market experienced a small drop of 5.5% in the number 300 of transactions and of 2.7% in the total amount of the 10 250 transactions registered with the Land Register. 200 8 12,6 11,2 11,5 150 10,6 10,4 10,8 10,3

° In the second half-year, the market of precast 8,8 9,1 9,2 100 transactionsNumber of 6 8,5 apartments returned to its stable volumes of about 400 5,5 50 transactions per month and the total amount of EUR 11 4 0

Total amount of transactions, mio. mio. transactions,amount TotalEUR of Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec million. This is the level which the market was used to Source: Land Register, Total amount Transactions during 2014. LATIO ° In the second half of 2015, when mortgage lending was Average price of precast apartments in Riga renewed and the market rebounded after the dramatic in December 2015, EUR/sq m decline at the beginning of the year, the number of 800 90 transactions was 22% higher than in the first half-year, 700 80 and it even exceeded the figures for both the first half 600 70 60 and the second half of 2014, with the market being the 500 50 most active over the last two years. 400 767 40 300 662 632 661 ° In the last quarter of 2015, market activity declined 30 Floorarea,sq m Cena EUR/m² Cena slightly with a drop of 3.1% after the impressive growth 200 → → 20 of 20% in Q3, but, if compared to Q4 2014, the number 100 10 of transactions decreased 2.9%. 0 0 1-room 2-room 3-room 4-room Source: Land Register, average price, EUR/sq m average area of apts, sq m LATIO

7 Residential Market Report, Riga, 2015. LATIO Market Analysis Department. Data publication without a reference to the source is prohibited! ° Two-thirds of all transactions with apartments in Breakdown of number of transactions with 2015 were concluded in the eight most sought- precast apartments in Riga by price category after neighbourhoods of Riga, with this share 600

remaining almost unchanged since 2014. 500 Compared to the previous year, a 10% increase in the market activity was observed in Iļģ uciems. 400

In Imanta, Vecmilgravis and Ziepniekkalns, the 300 activity decreased 12% to 15%. 200

° The most sought-after neighbourhoods in 2015 100 were the same as before – Purvciems and Numbertransactions of 0 Ķengarags – with an average of 25 to 30 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

transactions per month, followed by Pļavnieki Source: Land Register, < EUR 15,000 EUR 15,000 - 30,000 and Imanta in terms of demand. LATIO EUR 30,000 - 45,000 > EUR 45,000

° In Q4 2015, an increase in the number of transactions was observed in Iļģ uciems (27%) Breakdown of number of transactions with precast apartments in Riga by floor area and Jugla (8%) as well as outside the most sought-after neighbourhoods (9%). The activity 600 in other neighbourhoods dropped 12% to 18%, 500 except Ziepniekkalns as there was a 5% drop. 400

° The invariably most sought-after precast 300 apartments in 2015 were the Lithuanian developments, Khrushchev type housing and 200 100 Series 602 apartments, which together transactions Number of accounted for 63% of the total number of 0 transactions. During the year, the activity in Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep regard to precast housing of various types Source: Land Register, < 40 sq m 40 - 60 sq m > 60 sq m LATIO demonstrated a proportional decrease, while the demand in apartments in the houses of Series 103 decreased 17% during the year. SUPPLY ° There was no significant change in Q4 regarding ° Transactions are mainly concluded for the distribution of the demand for floor area. properties in the amount of 20 to 40 49% of transactions were concluded for thousand euros, that corresponds to 2 to apartments of 40 to 60 sq m, 29% for smaller 3 room apartments. apartments and 22% for larger apartments. Also, compared to the previous year, no changes in ° In this price range, there is a shortage of demand for floor area occurred, and there is no good supply at adequate prices; there is a reason to expect such changes in 2016. particularly pronounced deficiency of apartments with quality decoration on ° The demand in precast apartments remains middle floors. strong, and the number of such transactions ° The buyers take a very pragmatic and accounts for 2/3 of the total number of rational approach to the transactions and transactions in the residential market in Riga. are unwilling to overpay for the apartments in houses built in the Soviet period, searching for alternatives in the Remote Centre or in new housing developments.

8 Residential Market Report, Riga, 2015. LATIO Market Analysis Department. Data publication without a reference to the source is prohibited! PRICES AND FORECAST Breakdown of number of transactions with precast apartments in Riga by house series ° The number of transactions was stable, and for 120 the third consecutive quarter the prices on 100

precast apartments remained stable at 675 80 EUR/sq m on average in the last month of the 60 quarter, while a growth of 5.5% was observed in annual terms compared to Q4 2014. 40 20 ° The prices on precast apartments and the 0 Number transactionsNumber of market activity are also expected to be stable in Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Khrushchev Lithuanian 2016. The price increase is limited by the ability Small-family Series 602 Source: Land Register, Series 119 Series 467 of new housing developers to adapt themselves LATIO Series 103 to local demand after amendments to the Immigration Law, so the buyers are not willing to Breakdown of number of transactions with overpay for an apartment in a precast building. precast apartments in Riga by residential 80 borough What is the focus of buyers’ attention? 70 60 ° house management and building maintenance 50 quality; 40 ° amounts on utility bills; 30 ° overall technical condition of the apartment and 20 the building; 10 0 Number transactionsNumber of ° land ownership status (whether the land under Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Purvciems Ķengarags the building is leased or owned). Imanta Pļavnieki Source: Land Register, Ziepniekkalns Jugla LATIO Iļģ uciems Vecm īlgr āvis Range of prices on series 119 apartments in Range of prices on series 602 apartments in Riga in Q4 2015, EUR 60 000 Riga in Q4 2015, EUR 55 000 55 000 50 000 50 000 45 000 45 000 40 000 40 000 35 000 35 000 30 000 30 000 25 000 25 000 20 000 20 000 15 000 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 Source: rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. LATIO Source: Purvciems Pļavnieki Zolit ūde Ziepniekkalns LATIO Purvciems Pļavnieki Mežciems Imanta ZiepniekkalnsVecm īlgr āvis

Range of prices on Lithuanian series Range of prices on Khrushchev series apartments in Riga in Q4 2015, EUR apartments in Riga in Q4 2015, EUR 45 000 45 000

40 000 40 000

35 000 35 000

30 000 30 000

25 000 25 000

20 000 20 000

15 000 15 000 1 rm.2 rm.3 rm.1 rm.2 rm.3 rm.1 rm.2 rm.3 rm.1 rm.2 rm.3 rm. 1 rm.2 rm.3 rm. 1 rm. 2 rm. 3 rm. 1 rm. 2 rm. 3 rm. 1 rm. 2 rm. 3 rm. 1 rm. 2 rm. 3 rm. Source: Purvciems Mežciems Imanta Vecm īlgr āvis Bolder āja Source: Purvciems Jugla Ziepniekkalns Ķengarags LATIO LATIO

9 Residential Market Report, Riga, 2015. LATIO Market Analysis Department. Data publication without a reference to the source is prohibited! Apartment with a view of Kronvalda Park

APARTMENTS IN RIGA CENTRE Number of transactions with apartments MARKET ACTIVITY in Riga centre and total amount ° The segment of apartments in the city centre 10 100 9 includes a wide range of housing types, from 8 80 luxury apartments in the Old Town and the Silent 7 Centre to pre-war non-renovated buildings in the 6 60 Remote Centre; therefore, at the beginning of 5 2015 different segments went through the 4 40 3 4,8 changes to the real estate market environment in transactionsNumber of 2 4,0 3,9 3,8 3,9 3,9 3,6 4,2 3,9 20 2,6 different ways depending on the size of the local 1 1,9 2,3 demand. 0 0 Total amount of transactions, mio. mio. transactions,amount TotalEUR of Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Land Register, ° Overall, the number of transactions with LATIO Total amount Transactions apartments in the city centre decreased 19% in 2015, and the total amount of transactions Range of prices on apartments in city dropped 37%; in terms of the amount of money, centre in Q4 2015 6 000 this segment suffered most from the shrinking foreign demand. 5 000 4 000 ° In the Silent Centre, where transactions are mainly concluded for luxury and non-resident-oriented 3 000 properties, the activity fell 56%, while in the 2 000 Remote Centre, which is more focused on the 1 000

domestic demand, the drop was only 8% during 0 the year, and a greater influence of that decrease 1.Cat.1 kat. 2.Cat.2 kat. 3.Cat.3 kat. 1.Cat.1 kat.Cat.2 2. kat. 3.Cat.3 kat. 1.Cat.1 kat. 2.Cat.2 kat. 3.Cat.3 kat. 1.Cat.1 kat. 2.Cat.2 kat. 3.Cat.3 kat. was due to the cessation of mortgage lending in OLDVECR TOWNĪGA KLUSAISQUIET CENTRE CENTRS TUVAISNEAR CENTRE CENTRSREMOTE TĀLAIS CENTRS CENTRE Category 1: pre-war stone buildings, unrepaired the first months of the year which put the brakes Source: Land Register, Category 2: pre-war stone buildings, partly renovated LATIO on the local demand.

10 Residential Market Report, Riga, 2015. LATIO Market Analysis Department. Data publication without a reference to the source is prohibited! ° During the year, the number of transactions with non- Non-residents’ share in city centre apartment residents in regard to the housing segment in the city market by number of transactions centre declined by 58%, while the share of such 100% transactions in the segment was 13%; in 2014, every 90% fourth purchase transaction was concluded with a non- 80% resident. 70% 60% ° The average amount of purchases made by foreign 50% nationals in 2015 was ranging between EUR 100 40% thousand and EUR 150 thousand, while the buyers on the 30% domestic market bought property at a prices range of 20% 10% 23% 22% EUR 45 thousand to EUR 60 thousand on average. 13% 14% 13% 7% 11% 11% 10% 11% 12% 13% 0% ° In Q4, compared to the previous period, the number of Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Land Register, Share of number of residents’ transactions transactions remained almost unchanged, demonstrating LATIO Share of number of non-residents’ transactions a 1% increase. This was ensured by a 9% increase in the transactions in the Remote Centre, which accounts for Number of transactions with apartments in more than two thirds of the number of transactions on the Riga centre by administrative division apartment market in the city centre, while the activity in 70

other areas of the centre decreased 8% to 20% on 60 average. 50

° The interest of the local buyers in small apartments in the 40

Remote Centre has been growing for several consecutive 30

quarters; moreover, there is a trend that an apartment in a 20 pre-war house is an alternative to a precast apartment if 10

housing in a new development seems too expensive to transactionsNumber of 0 the buyer. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec SUPPLY Source: Land Register, Old Town Quiet Centre LATIO Near Centre Remote Centre ° As is the case with the precast apartments in the market, this segment demonstrated a continued Breakdown of transactions with apartments in insufficient supply of good quality apartments at an Riga centre by price category adequate price corresponding to the market 100 situation. 90 80 ° In the second half-year, the supply was 70 supplemented by a number of newly built houses 60 and renovated buildings, which will compete with 50 luxury apartments in pre-war buildings. 40 30 What is the focus of buyers’ attention? 20

Number transactionsNumber of 10 ° good location; 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ° visual and technical condition of the house; Source: Land Register, < EUR 50,000 EUR 50,000 - 100,000 ° well-groomed yard of the house and tidy LATIO EUR 100,000 - 150,000 > EUR 150,000 surroundings; ° house management costs and service provider; Breakdown of transactions with apartments in Riga centre by floor area creation of provisions; ° car parking facilities. 100 90 80 Administrative division of Riga city centre 70 60 Near Centre Quiet Centre Remote Centre 50 40 encompassed by encompassed by encompassed by Near 30 K.Valdem āra iela, Marijas K.Valdem āra iela, Centre, Quiet Centre, iela, A. Čaka iela, Old Kalpaka bulv āris, Valmieras iela, Pērnavas 20

Town and Mat īsa iela, Elizabetes iela, Eksporta iela and Sen ču iela (along transactionsNumber of 10 Šarlotes iela and A.Bri āna iela and Hanzas iela the railway ring) 0 iela Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec This overview presents an analysis of transactions with apartments in the Source: Land Register, < 50 sq m 50 - 100 sq m 100 - 150 sq m > 150 sq m LATIO centre of Riga, not with undivided shares of apartment houses

11 Residential Market Report, Riga, 2015. LATIO Market Analysis Department. Data publication without a reference to the source is prohibited! Half of the house for sale in Mežaparks PRIVATE HOUSES, LAND FOR RESIDENTIAL DEVELOPMENT MARKET ACTIVITY Number of transactions with private houses in ° The segment of private houses and land for private Riga and total amount development during the year was characterized by a 4,5 40 complete shift and adaptation to local market requirements. 4,0 35 3,5 ° An average of 23 transactions with private houses was 30 3,0 concluded in Riga in 2015, which is approximately 5 to 10 25 2,5 transactions less than a year ago. According to the 20 information on the transactions registered with the Land 2,0 15 Register, the average monthly amount totalled EUR 2.1 1,5 2,8 2,2 2,4 10 million in the private houses market. Half of the transactions 1,0 2,1 1,9 2,1 transactions Number of 1,4 1,6 1,6 were concluded for properties at a cost of up to EUR 50,000. 0,5 1,1 1,1 0,9 5 0,0 0 ° In Q4 2015, the number of transactions in the market Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total amount of transactions, mio. mio. transactions,amount TotalEUR of segment of private houses decreased 13%, while the amount Source: Land Register, Total amount of transactions dropped 22%. LATIO Number of transactions Number of transactions with residential ° The market decline in the quarter was affected by the very development land in Riga and total amount inactive last month of the year when only 9 transactions for a 1400 35 total amount of EUR 0.9 million were recorded, while the activity remained at an annual average level with an average 1200 30 of 26 transactions in October and November. 1000 25

° Experts believe that the decline of the market activity in 800 20 December was caused by a combination of various factors, 600 1175 15 which is often the case with such a small market, because 1146 1088 400 10 each transaction may significantly affect the statistical 716

646 transactions Number of 536 533 indices. There are no economic reasons for this trend to 515 451 450 200 346 5 continue in the near future: the market is stable, and a surge 242 of activity is expected at the beginning of the year. 0 0

Total amount EUR thou.transactions,amount Total of Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Land Register, Total amount LATIO Number of transactions

12 Residential Market Report, Riga, 2015. LATIO Market Analysis Department. Data publication without a reference to the source is prohibited! Typical range of prices on private houses in ° In December, the number of transactions with Riga and Greater Riga Area in Q4 2015, EUR properties at a price below EUR 50,000 dropped 220 000 four times compared to the annual average, but the biggest decline in the quarter was in regard to 180 000 transactions with houses for an amount of EUR 100 thousand to 150 thousand. 140 000

° In 2015, there was an increasing trend for buyers 100 000 to look for one-storey houses that was particularly pronounced among the buyers already having 60 000 experience of living in a two-storey house. 20 000 Jaunas / Vecas Jaunas / Vecas JaunasNew / / Vecas JaunasNew / / Vecas New / Old New / Old Old Old ° Buyers take a very rational approach towards renovrenovatedētas renovatedrenov ētas renovatedrenov ētas renovatedrenov ētas

RĪGAS MIKRORAJONI MMARUPE,ĀRUPE, BABBABITE,ĪTE, SALASPILS,SALASPILS, ĶEKAVA, OLAINES,OLAINE, SALAS,SALA, evaluating the optimum size of the house with a BOROUGHS OF RIGA BALOŽIBALOZI KEKAVA,ĀDAŽI ADAZI ININCUKALNS,ČUKALNA, BALDONES PAGASTI view to about 50 to 70 square metres per dweller. BALDONE PARISH Source: LATIO Currently, houses with extra space are less marketable. Breakdown of number of transactions with private houses in Riga by price category ° An average of 20 to 22 transactions with residential development land parcels was 40 registered in Riga which is approximately 7 to 12 35

monthly transactions less than a year ago. 30

° The average total amount of transactions per 25 month is EUR 0.7 million to EUR 0.9 million, 20 while the total area of the land parcels in the transactions was slightly below 3 hectares per 15 month, with an average land area measuring 10 Number transactions Number of

approximately 1,200 to 1,500 square meters. 5

° In Q4 2015, the number of transactions with land 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec for private construction in Riga increased 13% Source: Land Register, < EUR 50,000 EUR 50,000 - 100,000 compared to Q3 while the amount grew 5%; LATIO EUR 100,000 - 150,000 > EUR 150,000 however, the transactions on average were concluded with land parcels of a smaller area than in the previous quarter. Breakdown of number of transactions with residential development land in Riga by price ° The interest in residential development land is per sq m stable yet the time taken for transaction to be 35

concluded has extended since buyers make their 30 choice very carefully and the supply does not always meet the demand in land of appropriate 25

quality. 20

What is the focus of buyers’ attention? 15

° good quality of the building; 10

° well-groomed surrounding infrastructure; transactions Number of ° availability of schools and kindergartens; 5 ° good transport connections, availability of public 0 transport; Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ° the land parcel has access to the necessary utilities. Source: Land Register, < 15 EUR/sq m 15 - 30 EUR/sq m LATIO 30 - 45 EUR/sq m > 45 EUR/sq m

13 Residential Market Report, Riga, 2015. LATIO Market Analysis Department. Data publication without a reference to the source is prohibited! Apartment for rent in the Silent Centre of Riga

RENTAL HOUSING MARKET

GENERAL DESCRIPTION Dynamics of rental fees in Riga, EUR/sq m 12 ° In the second half of 2015, an average of 12% 11 to 15% decrease in prices in the rental housing 10 market was observed. The drop, however, did 9 not affect the rent charges for precast 8 apartments in the residential boroughs where 7 the market is active and the demand is higher in EUR/sq m 6 cheaper housing. 5 4 ° Despite the enlarging supply, the last few 3 2 months, just like the middle of the year, 2013-I 2013-II 2013-III 2013-IV 2014-I 2014-II 2014-III 2014-IV 2015-I 2015-II 2015-III 2015-IV

continued to demonstrate a shortage of supply Precast apartments of luxury apartments in the city centre or a New housing and fully refurbished buildings in city centre Source: Land Register, Pre-war brick-wall buildings, partially renovated (in good condition) shortage of private houses in the most LATIO Pre-war brick-wall buildings, non-renovated (built until 1940) prestigious neighbourhoods of Riga such as Mežaparks. ° In the near future, the rental market and the prices in the market of precast apartments ° The luxury apartment segment demonstrates a decline in non-residents’ solvency and demand and luxury housing will remain stable. due to devaluation of the Russian rouble. However, along with an increased activity in acquiring housing in new developments, the ° The market shows growing interest in investing demand for rental apartments in this segment available funds in multi-storey buildings in order will decrease gradually; therefore, slight price to turn them into rental properties and generate adjustments can be expected in the near a stable income to the owners. future.

14 Residential Market Report, Riga, 2015. LATIO Market Analysis Department. Data publication without a reference to the source is prohibited! House for sale in Sigulda RESIDENTIAL MARKET IN REGIONAL CITIES DAUGAVPILS ° In Q4 2015, the apartment market activity in Daugavpils ° The private house market trends also remained at the remained at the previous level. No price or activity previous level. Buyers are more interested in increase is expected in any of the apartment market properties with quality decoration hence not requiring segments in the foreseeable future, and they will stay at additional investment. the current level. JELGAVA ° The demand is dominated by 1 to 2 room apartments not ° In Q4, the market activity in Jelgava remained requiring much to invest. Most transactions are concluded unchanged. The supply still exceeds the demand. with apartments in the price range between EUR 4,000 and 10,000. ° The demand is dominated by two-room apartments at a price of up to EUR 23,000. ° The prices on precast apartments range from EUR 150 to EUR 400 per sq m in the city centre and from EUR 100 to ° The buyers’ interest in apartments in new EUR 300 per sq m in the residential boroughs. developments is low; the apartments are offered at a price of EUR 700 to EUR 850 per sq m. The average ° No new apartment houses have been built in the city since price charged for apartments in the city centre is 600 2009, and in recent years there have been no transactions EUR per sq m. with apartments in new developments. In Q4 2015, two apartments in the new development at 25 Ak.Graftio Street ° In December 2015, the average precast apartment were offered for sale at EUR 450 to 620 per square metre. price amounted to EUR 376 per sq m thus representing a slight increase compared to the ° Demand for apartments in shell condition in reconstructed previous period. developments was small. In Q4 2015, a few apartments in shell condition in the renovated residential buildings in ° Demand for private houses in Jelgava has not Jaun ā Forštate (19 Ave ņu Street and 11 Telts Street) and changed significantly, and small houses with an area in Jaunb ūve (11 Arodu Street) were offered for sale at of up to 150 sq m are of particular interest. Buyers EUR 200 to 300 per sq m, while apartments in shell look for both new and old houses. The bulk of condition in the city centre (10A Gimnazijas Street) were transactions are concluded with houses at a price of offered at a price from EUR 350 per sq m. up to EUR 50,000.

15 Residential Market Report, Riga, 2015. LATIO Market Analysis Department. Data publication without a reference to the source is prohibited! ° The number of transactions with private houses ° The latter half-year demonstrated an has increased during the last quarter. High quality increasing demand in apartments in new houses built over the past 5 to 7 years are of developments in Liep āja. Due to their low particular interest. prices, the most transactions were concluded with apartments in Ezermalas house where ° Buyers’ interest in residential development land is almost all the apartments have been sold out. low; the decision depends on location and The interest in other new developments is available utilities. The average price is between lower as their prices are much higher . EUR 3 and 12 per sq m. ° Interest in private houses has been observed ° Interest in farmland is high, but the supply is low. in the market: there are 2 to 3 transactions Farmsteads which generate interest are primarily concluded per month. Demand is stronger in those in parish centres and near urban areas. houses offering immediate moving in with possibility of graduate redecoration thereof. The prices on such properties range from LIEP JA Ā EUR 30,000 to EUR 50,000. The private ° The apartment market activity in Liep āja in Q4 houses in Vecliep āja and Lauma boroughs involved 95 to 100 transactions per month on are of particular interest . average . ° The rental market is largely affected by the ° 2 to 3 room apartments are still of great interest. tourist season with a focus on short-term rent The strongest demand is observed in for foreigners . undecorated apartments, while the demand in ° Demand for residential development land in redecorated apartments is not too far behind Liep āja is relatively low. The most sought- either . after land parcels are those in Vecliep āja . ° Apartment prices, depending on their technical ° There are relatively few transactions with condition, location and type of building, range farmsteads as they depend on the lending between EUR 200 and EUR 600 per sq m. The policy. The buyers’ interest continues to lie most sought-after neighbourhoods are within a radius of 25 kilometres from Liep āja. Ezerkrasts, Southwest area, and the centre . Farmsteads are often purchased because of the agricultural land or forest stands coming with them .

Range of prices on precast apartments in Rent charge for typical furnished apartment of the largest Latvian cities in Q4 2015, EUR 60 sq m in the largest Latvian cities in Q4 2015, EUR 55 000

50 000 650

45 000 550 40 000 540 35 000 450

30 000 350 25 000

Rental fee,Rental EUR 300 20 000 250 225 15 000 180 10 000 150 125 120 5 000 50 0 RIGA LIEP ĀJA DAUGAVPILS RIGA LIEP ĀJA DAUGAVPILS 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 PRECAST APARTMENTS APARTMENTS IN CITY CENTRE Source: rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. rm. LATIO Source: Land Register, LIEP ĀJA VENTSPILS JELGAVA OGRE DAUGAVPILS LATIO

16 Residential Market Report, Riga, 2015. LATIO Market Analysis Department. Data publication without a reference to the source is prohibited! OGRE VENTSPILS ° Q4 2015 with 48 transactions was similar to Q2 in ° Market activity in Q4 in Ventspils did not change terms of figures. significantly. The demand and the number of transactions are higher in the city centre and ° The average price per sq m of precast apartments smaller in Pārventa part of the city . in Ogre is EUR 350 to EUR 500. ° The highest demand is for 2-3 room apartments ° Buyers are mainly interested in two-room in excellent condition in the city centre; however, apartments at a price of EUR 350 to EUR 450 per there is also interest in non-renovated and sq m in an average technical condition or EUR vacant apartments with commenced 300 to EUR 350 per sq m without repairs. redecoration . ° Buyers’ interest in apartments in the new ° In Ventspils, where there are no new developments continues to be low. Interest in developments, apartments in non-standard apartments in pre-war or non-standard housing blocks of apartments are in demand . developments is also low, and the supply of apartments is poor in this segment, too. ° Prices on precast apartments in the central districts of the city range from EUR 450 to EUR ° In Q4, demand for private houses did not change 600 EUR per sq m. significantly. Like before, the strongest demand was in houses 120 to 170 sq m large built in the ° The apartment market in the historic centre of second half of the last century and with their land the housing is underactive due to a lack of plot measuring between 1,200 and 1,500 sq m. quality supply . Prices on such houses range from EUR 40,000 to ° Demand in private houses remains low, and EUR 70,000 EUR. Demand for expensive houses most transactions are concluded in Gāli ņciems. at a price above EUR 150,000 is very low. Buyers are interested in new or fully refurbished ° The offer in the market also includes houses . reconstructed buildings improved for permanent ° Typical prices range from EUR 35,000 to EUR living that are situated in the areas of urban 55,000 for old private houses and from EUR allotments and summer cottages. Such houses 100,000 to EUR 140,000 for new private are being offered at prices ranging from EUR houses . 25,000 to EUR 50,000. ° There were only a few transactions with ° Activity in the market of residential development commercial land in late 2015 and early 2016. land is low. Important factors include location of This sector has historically been the least active. the land parcel in the city, electricity connection Several land parcels for low-rise development and the opportunity to connect urban utilities. have been sold in the urban part of Gāli ņciems Prices for a land parcel of 1,200 to 1,500 sq m near the River Venta (at ca.15 EUR per sq. m) . range from EUR 10 to EUR 20 per sq m. ° The number of transactions with farmsteads is ° Activity in the market of rural property in Ogre small, the supply is poor, and the buildings are Region is low. Transactions are concluded mainly often very shabby. There is a high demand in with residential houses built at the beginning of agricultural lands, and in some places, where the last century without amenities and with a small the interests of several large farmers overlap, backyard land parcel of about 2 to 10 ha. the price can reach up to EUR 4,000 per ° The strongest demand in the market of hectare. The average price is EUR 2,000 to agricultural land is in land parcels measuring over EUR 3,000 per hectare . 10 hectares. Average prices range from EUR ° In anticipation of the new summer tourist 1,000 to EUR 2,800 per hectare. season, some guest houses in the seaside part of the city have been sold .

17 Residential Market Report, Riga, 2015. LATIO Market Analysis Department. Data publication without a reference to the source is prohibited! Addresses of Latio branch offices Latio

Riga Region Property trading, lease, rent, assessment, consultations, Riga/Central Office Riga/Centre branch office Elizabete Riga/Imanta branch office services to corporate K. Valdem āra iela 8, Elizabetes iela 20, Anni ņmuižas bulv āris 88, Riga, LV-1010 Riga, LV-1050 Riga, LV-1029 customers, market analysis phone: +371 67032300 phone: +371 67201929 phone: +371 67440000 Central Office e-mail: [email protected] e-mail: [email protected] e-mail: [email protected] K. Valdem āra iela 8, Riga, LV-1010 Riga/Purvciems branch office Jūrmala branch office Majori Jūrmala branch office Kauguri phone: +371 67032300 Madonas iela 27, Jomas iela 30, Majori, Nomet ņu iela 4, Kauguri, fax: +371 67032302 Riga, LV-1035 Jūrmala, LV-2015 Jūrmala, LV-2016 e-mail: [email protected] phone: +371 67549355 phone: +371 67755506 phone: +371 67740777 e-mail: [email protected] e-mail: [email protected] e-mail: [email protected] www.latio.lv

Limbaži branch office Ogre branch office Sigulda branch office Latio vērt ētāji & Br īvības iela 22, Pils iela 2, konsultanti Vidzem ē SIA Ogre, LV-5001 Sigulda, LV-2150 Rīgas iela 7, phone: +371 65035733 phone: +371 67976723 Limbaži, LV-4001 e-mail: [email protected] e-mail: [email protected] phone: +371 26334584 e-mail: [email protected] Metrum

Tukums branch office Surveying, territory planning, Katr īnas laukums 1, geospatial services Tukums, LV-3101 phone: +371 63125319 Ģertr ūdes iela 47, e-mail: [email protected] Riga, LV-1011 info: +371 80008100 phone: +371 67860311 Kurzeme Region fax: +371 67609044 e-mail: [email protected] Liep āja branch office Talsi branch office Ventspils branch office Graudu iela 27/29, K. Valdem āra iela 17, Kuld īgas iela 11, www.metrum.lv Liep āja, LV-3401 Talsi, LV-3201 Ventspils, LV-3601 phone: +371 63422190 phone: +371 63221922 phone: +371 63629566 e-mail: [email protected] e-mail: [email protected] e-mail: [email protected]

Latgale Region

Daugavpils branch office Prei ļi branch office Rēzekne branch office Ģimn āzijas iela 34/36-13, Rai ņa bulv āris 24, 18. novembra iela 16, Latio Namsaimnieks Daugavpils, LV-5400 Prei ļi, LV-5301 Rēzekne, LV-4600 phone: +371 65429515 phone: +371 65307407 phone: +371 64628276 Management, administration, e-mail: [email protected] e-mail: [email protected] e-mail: [email protected] renovation of buildings, heat insulation Vidzeme Region Elizabetes iela 20, Riga, LV-1050 Al ūksne branch office Cēsis branch office Gulbene branch office phone: +371 67357700 Latio vērt ētāji & Latio vērt ētāji & Latio vērt ētāji & mob.ph.: +371 22120000 konsultanti Vidzem ē SIA konsultanti Vidzem ē SIA konsultanti Vidzem ē SIA fax: +371 67218092 Pils iela 27, Raunas iela 15, O.Kalpaka iela 62, e-mail: [email protected] Al ūksne, LV-4301 Cēsis, LV-4101 Gulbene, LV-4401 phone: +371 64322452 phone: +371 64127447 phone: +371 26544881 www.lationamsaimnieks.lv e-mail: [email protected] e-mail: [email protected] e-mail: [email protected]

Valka branch office Valmiera branch office SIA Latio vērt ētāji & Latio vērt ētāji & konsultanti Vidzem ē konsultanti Vidzem ē SIA Rīgas iela 11 Rīgas iela 39, Valka, LV-4701 Valmiera, LV-4201 phone: +371 64725346 phone: +371 64207022 e-mail: [email protected] e-mail: [email protected]

Zemgale Region

Jelgava branch office Jēkabpils branch office Liel ā iela 15, Kato ļu iela 6, Jelgava, LV-3001 Jēkabpils, LV-5202 phone: +371 63046480 phone: +371 65237177 e-mail: [email protected] e-mail: [email protected]

18 Residential Market Report, Riga, 2015. LATIO Market Analysis Department. Data publication without a reference to the source is prohibited!