HOUSING MARKET OVERVIEW July 2011

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HOUSING MARKET OVERVIEW July 2011 HOUSING MARKET OVERVIEW July 2011 Standard type apartment Sales price of standard type apartments , apartment sales volume, Riga 1 800 1 800 In Riga the average price of a square meter in standard 1 600 1 600 type apartment in July continued to decrease and was 1 400 1 400 576 euro – two euro or 0.3% less than in previous month. 1 200 1 200 The prices continued to decrease already third month in a row. The average price of standard type apartment in 1 000 1 000 Riga has decreased by 1% since January and by 0,3% in 800 800 last 12 months. apartment sale 600 600 The activity of the buyers has remained at previous level. Number of records on 400 400 Average price per standard type apartment, EUR/sq.m The prospective buyers are interested in purchasing one 200 200 or two room apartment in good condition. 0 0 The prices of standard type apartments in good technical l.04 l.05 l.06 l.07 l.08 l.09 l.10 l.11 ū ū ū ū ū ū ū ū J J J J J J J J Jan.04 Apr.04 Jan.05 Apr.05 Jan.06 Apr.06 Jan.07 Apr.07 Jan.08 Apr.08 Jan.09 Apr.09 Jan.10 Apr.10 Jan.11 Apr.11 condition at neighborhoods as Purvciems, Plavnieki, Okt.04 Okt.05 Okt.06 Okt.07 Okt.08 Okt.09 Okt.10 Zolitude, Imanta and Ziepniekkalns in July were 19 000– Number of deals registered at the Land Register Source: Land Register, LATIO 31 000 euro for one room apartments, 28 000–39 000 Average price of standard type apartment euro for two room apartments, 33 000–45 000 euro for three room apartments, 40 000–53 000 euro for four room apartments. New projects In contrary to standard type apartment segment, the prices of the apartments in new project houses both in Riga city neighborhoods and in the center have Credits granted to private individuals by commercial banks portfolio and changes 7 000 350 increased. Credit portfolio Changes of credit portfolio 6 000 300 Prices of new housing at the centre of the capital have 5 000 250 increased by 18% in one year period and by 24% in two 4 000 200 year period due to demand of foreign buyers. For Credit portfolio, mln.LVL 3 000 150 separate projects in the Center of Riga prices have grown by almost 50% in two year period. Such a rapid 2 000 100 increase during last year was observed due to growing 1 000 50 Changes of credit portfolio, mln.LVL demand of foreign buyers related to changes in 0 0 Immigration Law and due to limited offer. It should be -1 000 -50 taken into consideration that the proportion of new -2 000 -100 Jun-11 Jun-10 Jun-09 Jun-08 Jun-07 Jun-06 Jun-05 Jun-04 Jun-03 Jun-01 Jun-02 Mar-11 Mar-10 Mar-09 Mar-08 Mar-07 Mar-06 Mar-05 Mar-04 Mar-03 Mar-02 Sep-10 Dec-10 Sep-09 Dec-09 Sep-08 Dec-08 Sep-07 Dec-07 Sep-06 Dec-06 Sep-05 Dec-05 Sep-04 Dec-04 Sep-03 Dec-03 housing at the center of Riga is very small in relation to Sep-02 Dec-02 the total volume of new project apartments. Source: the Finance and Capital Market Commission, LATIO In July, the same as in previous months, the largest activity was observed in Riga Center and Jurmala. In July the prices in new project apartments depending on decoration, project and location were 700-850 euro per square meter in Riga suburbs, 900-1400 euro per square meter in Riga neighborhoods, 1100-1600 euro per square meter in Riga center and 2500-3500 euro at projects with good location in the center of Riga. Credits granted to private individuals by commercial banks changes, average prices of typical apartment square meter 350 1750 Apartments in Riga Center 300 1500 250 1250 In July foreign buyers kept the interest for good 200 1000 apartments in renovated houses of Old Riga as well as at the quiet and close center of Riga. 150 750 Average price, EUR/sq.m 100 500 The increase in demand and limited offer for apartments Changes of credit portfolio, mln.LVL corresponding to the needs of foreign buyers has evoked 50 250 the raise in prices. Prices for quality apartments in 0 0 renovated houses in Old Riga have increased by 18% in average price of sq.m in a standart type block house, EUR -50 -250 one year period and by 23% in two year period. In close credit portfolio changes and quiet center of Riga prices for such housing have -100 -500 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 increased by 14% since July 2010. Source: the Finance and Capital Market Commission, LATIO Housing market overview, July 2011 1 Data publishing without a reference to the source is forbidden! LATIO Market research department, 2011 HOUSING MARKET OVERVIEW July 2011 Prices at the closest center in July were 900-1200 euro Apartment transactions in Riga per square meter for medium condition apartments and registered with the Land Register 1200-1500 euro per square meter for renovated 2 000 Apartment transactions registered with the Land Register 1 800 apartments. Prices at the silent center were 1200-1400 at addresses created after March 2006 (new projects) euro per square meter of medium condition apartments 1 600 and 1600-1800 euro per square meter of renovated 1 400 apartments. Prices for very good apartments at 1 200 renovated houses in the center are 2000 euro per square 1 000 meter reaching even 5000 euro per square meter in 800 separate houses. 600 The demand of local inhabitants for apartments in the 400 centre remains stable therefore prices of properties 200 further away from Old Riga and outside interest of 0 foreign buyers are not increasing. Prices of medium Jul-10 Jul-09 Jul-08 Jul-07 Jul-06 Jan-11 Apr-11 Jan-10 Apr-10 Jan-09 Apr-09 Jan-08 Apr-08 Jan-07 Apr-07 Jan-06 Apr-06 Oct-10 Oct-09 Oct-08 Oct-07 condition apartments in the further centre in pre-war Oct-06 Source: Land Register, Cadastre Register, LATIO houses were 650-900 euro per square meter, and 900- 1100 euro per square meter for renovated apartments. Jurmala Month of July demonstrated a considerable activity in Jurmala housing market where the demand is ensured by foreign buyers, mainly from Russia and other former CIS countries. Part of the buyers is willing to buy the Housing transactions in Latvia property due to changes in the Immigration Law, and part registered with the Land Register of the buyers intends to buy housing for spending the 5 000 4 500 vacation. Buyers interested in residence permits are apartments private houses 4 000 searching apartments for a price until 200 000 euro. 3 500 The increase of demand can be seen in the statistic 3 000 report of the deals. As per data of the Land Register, the number per month 2 500 number of deals in Jurmala during first half of this year 2 000 has reached the highest level since the end of 2007. 1 500 Comparing to first half of 2010 the purchase deals of 1 000 housing this year has increased by 1,5 times. 500 0 The prices of new project apartments in Jurmala are Jul-11 Jul-10 Jul-09 Jul-08 Jul-07 currently between 3800 and 4500 euro per square meter. Jul-06 Jan-11 Apr-11 Jan-10 Apr-10 Jan-09 Apr-09 Jan-08 Apr-08 Jan-07 Apr-07 Jan-06 Apr-06 Oct-10 Oct-09 Oct-08 Oct-07 Oct-06 The offer includes even more expensive apartments Source: Land Register, LATIO when the price is determined by a very good location, view to the sea or any other feature of exclusiveness. The prices of apartments tend to increase. A slight price increase is currently observed also in segment of detached houses – both for Jurmala houses with a price between 200 000 – 350 000 euro and expensive houses. Deals Housing transactions in Jurmala registered with the Land Register Latio has made an analysis of the data of Land Register 180 and it shows that number of deals with housing in Latvia 160 apartments private houses during seven months of 2011 comparing to first seven 140 months of 2010 has increased by 10,6%. 120 100 The total number of deals in Riga from January till July number per month this year has increased by 4,9%. In capital city a more 80 rapid increase is observed at detached houses 60 segment – number of deals comparing to first seven 40 months of 2010 has increased by 34%, but the number 20 of deals of apartments has increased by 2%. The 0 average number of deals per month in Riga this year is Jul-11 Jul-10 Jul-09 Jul-08 Jul-07 Jul-06 Jan-11 Apr-11 Jan-10 Apr-10 Jan-09 Apr-09 Jan-08 Apr-08 Jan-07 Apr-07 Jan-06 Apr-06 Oct-10 Oct-09 Oct-08 Oct-07 440 deals on apartments and 55 deals on private Oct-06 Source: Land Register, LATIO houses. Housing market overview, July 2011 2 Data publishing without a reference to the source is forbidden! LATIO Market research department, 2011 HOUSING MARKET OVERVIEW July 2011 Housing rent market Capitalization rate and percentage rate 8% Comparing to previous months, the demand in Riga 7% apartment rent market in July has decreased which is 6% explained by summer vacation season.
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