ARCO REAL ESTATE

In November 2009, in comparison with October, the price increase is established – in general the prices of standard-type apartments in Riga increased on average by 2,9 %. The highest price increase is observed in Zolitūde (5,2%), the same as in Imanta (4,7%). However, absolutely insignificant price increase is established in Vecmīlgrāvis (1%) and Purvciems (1,6%). The prices for standard-type apartments have been increasing during the second months. After the price increase in October for 0,8% that was supposed to be the price stabilization, the price increase in November is already close to the tendency of the price increase. There is no significant price difference for the apartments located in the Center. Taking into consideration the deals and proposals data base with greatly differed characteristics of apartments, the prices for the Center-located apartments were from 750 to 2600 EUR/m² in November. The similar situation is also with the new projects buildings in Riga housing estates, where the price value of one square meter has almost no changes and composes from 780 to 950 EUR/m². According to the mentioned, there could be made the conclusion that the prices for the standard-type apartments with the result of the lowest proposals verge great influence, glided down too low during the summer months and now they have the tendency to „recover”. It is supposed that Standard-type apartments in the nearest months would be in the limit of 2-3% with the high reliability of price increase opportunity.

 

 „The process of the apartment market development during the last three months could be characterized as the first insignificant breath of wind in 2009 after the complete windless and stagnation period that was dominated on the real estate market.

Standard-type apartment market showed the first price decreasing (price decrease – 0.2%) in September after the price reducing marathon that has been lasting for 21 months. In fact, in bounds of the month it could be regarded as the price stabilization. The market analysis of October had showed the first price increase for 0.8%, but in its turn the data for November showed the price increase for 2.9%.

 In short-term perspective, such kind of price changes on the standard-type apartment market could be characterized as the price increase. But if look for it in the long-term perspective from the July 2007 when the price recession starts, then the price changing during the last months should be examined as the prices stabilization process.

The analysis for November also shows the small tendency of proposals increase that is absolutely naturally. As far as proposals quantity reducing in last months time is explainable with having no wish of apartments owners to make the deals by the lowest prices and pessimistic forecasts of market situation improvement. In its turn, the number of proposals grew up together with the average market price increase. Also there should be mentioned that the number of the deals the same as the interest to the apartments purchasing noticeably increased in November. In separate housing estates and apartment group segments is formed the situation when the prices of existing in offers apartments exceed the average market price for 20%.

Noticeable changes were not ascertained on the average price apartments in the Center, were the limits of the lowest and the highest price is still considerable (from 750 till 2600 EUR/m²). It is explainable with greatly dissimilar apartment’s descriptions. The proposals number in low-price segment increased in November – this are the non-renovated or partly renovated apartments located on Center outlying districts.

The highest interest and the quantity of deals relate to the price segment from 1300 till 1600 EUR/m² - these are the apartments with the average area till 80m², with good finishing that are located in qualified buildings of the city’s central part.

The second biggest group with the price diapason from 900 till 1100 EUR/m² is the apartment with qualified finishing located out of the most valuated streets of the central part.

In November there increased the activity in “new projects” segment, especially in the category of apartments with finishing. It is significant that developers’ actions for the separate projects price increasing were successful and it also noticeably increased the sales volumes. In November the average apartment price in the new project was from 850 to 1300 EUR/m² with finishing and from 750 to 1100 EUR/m² without finishing.

In November there increased the activity in apartments rent market, especially in the central part of the city, where the average rent price is from 5 till 6 EUR/m².

As a whole, the activity of the whole apartment market segment in November is valuated as the highest in 2009. In spite of poor economical condition and decreasing of population income level, the price growing tendency is mainly connected with the relatively stable proposals base, low price level increasing and potential buyers’ assurance in achieving the lowest price level in August. Definitely the planned taxes in the New Year influenced on the activity of the deals  that let to part with the saving into the benefit of real estate purchasing this year.”

 

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/14.12.2009./