ARCO REAL ESTATE

In October, 3 new residential house projects in total have been launched for sale in Riga; this is by 1 project more than in September when the number of new projects launched was exclusively low – only 2. Outside Riga, the total number of new projects is five: one new project has been launched in Jūrmala, one – at Mārupe, and three – at Salaspils.

 

When comparing the data of October with the data of July and August (6 new projects were launched in July and 7 in August), we can see that the activity in the new project market still is low – the developers are prudent and analyze and evaluate market possibilities, demand and profitability of new projects more carefully. So, for example, a lot of small developers have already abandoned their initial plans to build multi-apartment houses in housing estates of Riga, which fact may be deduced from the increasing number of announcements about sale of land plots with already developed multi-apartment house building projects. Also the big developers, taking into consideration the existing market situation, have decided to suspend implementation of certain new projects. In addition, in order to encourage buyers to acquire new dwellings, developers of new projects are offering various bonuses and gifts, such as car parking places, household appliances, kitchen equipment and other things value of which may achieve several thousand EUR; or, for example, if you buy a new private house at Mārupe, you can get a new car as a gift.

 

Comparing the launched projects as to their location in various housing estates we can see the tendencies that were characteristic for previous periods – the most popular locations of development are the central part of Riga and the most popular housing estates, such as Pļavnieki, Iļģuciems, and Purvciems. So, for example, during the last 4 months, 3 projects were launched at Pļavnieki, 1 project at Purvciems, 2 projects at Jugla, 2 projects at Iļģuciems, 1 project at Čiekurkalns, and 6 projects in the city centre.

 

If we compare the price of a typical apartment in the Riga District with the price of a typical new apartment in a housing estate of Riga, we can see that the average difference is 30% and that this difference has not changed significantly since the beginning of the year. But the price difference between a typical apartment in the region around Riga and a non-renovated standard-type apartment is by 4% bigger in average. If we take the Riga District and compare the data of the last 4 months with the data of the first six months of the current year, we can see that both the lower and the upper limits of the new project prices are decreased; i.e., if the price level of new projects offering the “white” interior decoration degree and located in the vicinity of Riga fluctuated from 1200 to 1800 EUR/m² in the first six months of the year, then during the last 4 months this price varied from 1100 to 1600 EUR/m², and the average price was 1400 EUR/m², but if we take apartments with complete interior decoration, the price varied from 1300 to 2100 EUR/m², so that the average price was 1700 EUR/m².