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Market recovery or growth signs not observed in the standard-type apartment market this year

  • The situation in the standard-type apartment market in October is consistent with the previous forecast, which predicted that no substantial price changes are to be expected in the remaining months of this year


Market recovery or growth signs not observed in the standard-type apartment market this year

 

In October of 2011, minimum price changes were observed in the standard-type apartment market. The average price of standard-type apartments in October 2011 has declined to 583 EUR/m². Thus, the price level in October decreased only by 0.2%, which does not indicate the presence of any considerable trends in the market. Since the beginning of 2011, the average prices of standard-type apartments have decreased by 4.3% in total.

 

In 2011, the overall activity in the real estate market has not survived any significant jumps or drops. Prices have become stagnant and, in general during 2011, the prices have declined slightly. In some neighbourhoods the price reduction has exceeded 7%, which is nevertheless considered to be a significant fall in prices. Thus, any signs of market recovery or growth at least in the apartment market have not been observed this year.

 

The number of apartments offered in the market has decreased slightly in October. In Riga the total the number of apartments offered in the market has increased by 1.1 %, but in the largest housing estates this number has decreased by 2.9%. The number of offered apartments that are located in the central part of Riga has increased by 7.6%.

 

Since the beginning of 2011, the average price of 1 m² of a standard-type apartment has decreased by 4.3%. The biggest price drop as per November 1, 2011 was observed at Ķengarags – by -7.5%. But the smallest price drop has been observed at Teika where the prices during this year have declined only by 1%.

 

Mr. Māris Laukalējs, Member of the Board of Directors of ARCO REAL ESTATE, Head of the Valuation Department:
„The situation in the standard-type apartment market in October is consistent with the previous forecast, which predicted that no substantial price changes are to be expected in the remaining months of this year.


The overall situation in the housing market is developing according to the trends existing in the real estate sector – the prices in the standard-type apartment segment are slightly decreasing, and the supply is decreasing accordingly, because the owners currently have little interest in offering apartments on the market at current market prices. The standard-type apartment market is more attractive to buyers.


But in the segment of apartments located in the central part of Riga City, a price growth has been observed during the recent quarters, so that the existing trend in this segment is opposite - the supply is growing, which means that the current market price is attractive for real estate sellers.


In subsequent months, the trend of price and supply growth in the segment of city centre apartments as well as in the segment covering a part of apartments in new projects will continue, as the number of apartments offered - especially in new projects - decreases and a bigger interest in purchase of property is observed just in this segment."

 

Additional information>>


09.11.2011.

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