Quote:
Originally Posted by propertastic
You are too late into Riga. It was the fastest growing market in Europe in 2005 and 2006.
By the end of 2006, prices were higher there than in Stockholm, Copenhagen and Oslo.
It all stopped in March 2007 though when the government put restrictions on borrowings to stop the rapdly overheating economy. It did the trick as it became practically impossible for anyone to borrow money without providing a lot of paperwork (which most people in the market for buying EUR250,000 properties weren't able to provide.
Since then, prices have been falling there by 2-3% per month.
Exactly the same thing happened in Kazachstan as well.
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well that's exactly my point about a two-speed market!
i disagree slightly - prices have been falling by 2-3% a month for the post-war soviet series, many at the periphery of the city, and for low-quality builds in zolitudes, purviciems, etc. but prices are holding for quality new builds around the new centre and in kliversala/kipsala (the old town is a different story - it's a micro market within the city). new developments are fetching record high prices and seem to attract interest from russian buyers - some of them at nearly €10,000 per square metre. the irony is that with a freeze on new builds, existing ones are very much in demand if the location and quality justifies the price tag!
i have been buying property in riga since 2005 & despite the current turmoil i still find the fundamentals really good. the fact that prices are higher than in stockholm is not a valid indicator of how far the market can go - moscow is more expensive than paris. i was in riga last week and what i saw is strong rental demand that is lifting yields to attractive levels (in 12 months i have passed a 20% rental increase onto a tenant), a 25% yoy wage increase that has eroded the cost of property and many buyers sitting on the fence. there's a sense that after a correction affordability factors are favourable again and that if it wasn't for cautious lenders (primarily nordic banks) the market could be ready for take-off again.