In 2016 the real estate market will be a little "shook up"!
„Due to Immigration Law amendments at 2015 non-residents activity continued to decline. But the development of the market was influenced by Insolvency Act amendments that entered into force on 1st of March 2015 – these amendments were adopted in the interests of the banks and have the effect of encouraging lending. Specialists forecast of economic development is relatively positive and we believe that in the 2016 in real estate industry there will be a slight growth of 10%", comments the CEO of company BALSTS Aigars Zarins.
From the beginning of 2015 the average apartment prices increased by 1.99%. The highest average apartment sq.m. price increases in Riga suburbs were observed at Kengarags and Ziepniekkalns, but the smallest price increases were observed at Teika (-0.80%) and Vecmilgravis (0.09%). In the other largest Riga suburbs prices also rose year-on-year in annual levels. These increases can be explained by a significant reduction in properties on offer at lower price levels, and the remaining offer price increase.
Real estate transactions at 2015 compared to 2014 decreased by 7%. As well due to lower non-resident activity there has been a total investment volume reduction. We expect that the new government in 2016 will give more emphasis and effort in to business development and economic growth.
Demand for Riga office space market in 2015 still remained stable, explaining unchanged rental cost levels. We expect that rents in 2016 will not increase, as well as in some segments possibly even decline. The highest demand is for small and medium sized Class B offices from 30-100m2 in the city center or in the quiet center with average price up to 8 EUR/m2.