The decline of prices of standard-type apartments in Riga continued in December 2014 for the third consecutive month. Despite the fact that such a situation last time was seen only three years ago, yet the decrease in prices is to be considered as low because in the 4th quarter the overall price level decreased only by 0.5% or 4 EUR/m², informs Mr. Māris Laukalējs, a Member of the Board of Directors of ARCO REAL ESTATE.
At the end of 2014, the average price of a standard-type apartment decreased to position of 637 EUR/m². The prices on average were by 60.7 % lower than on July 1, 2007, when the average price of a non-renovated standard-type apartment reached the highest ever value - 1620 EUR/m². But compared to the beginning of 2014, the prices of standard-type apartments in the housing estates of Riga in December 2014 were by 3.9 % higher, as it is stated in the market overview prepared by ARCO REAL ESTATE.
In December 2014, a decrease of standard-type apartment prices was observed in most housing estates of Riga. The largest decrease of the average price of 1 m² in December was observed in Bolderāja (-0.8 %), Mežciems (-0.5 %) and Ķengarags (-0.5 %). In Vecmīlgrāvis, the price level remained unchanged in December. In turn, the prices grew in Zolitūde (+0.4 %) in December.
The highest standard-type apartment prices in December 2014 still were in Teika, where the average price of 1 m² decreased in December, reaching the level of 798 EUR. But the lowest average price of 1 m² still was observed in Bolderāja where in December it dropped to 454 EUR/m².
The total number of apartments offered for sale in Riga at the end of 2014 had decreased by 12.1 %. The number of apartments offered for sale in the major housing estates reviewed by ARCO REAL ESTATE also had decreased by 8.8 %. The largest number of apartments offered for sale in housing estates in December was in Purvciems (404), Imanta (301) and Ziepniekkalns (289). But the lowest number of apartments offered for sale was in Bolderāja (62) and Vecmīlgrāvis (94).
Mr. M. Laukalējs explains that events observed in the real estate market in December were caused by a combination of several factors, such as lack of clarity regarding practical implementation of the "non-recourse loan" principle, as well as the unstable geopolitical situation in neighbouring countries and the Russian rouble value fluctuations, which indirectly affected the cautious position of the local buyers. "If the impact of these external factors will not change in the first half of the year, this will result in a significant negative impact on the market as a whole. The chain reaction of negative effects will be observed in all real estate segments," predicts the expert.