ARCO REAL ESTATE

 

In May 2010 the rate of price increase was reduced in comparison with the previous months and in general the prices for the standard-type apartments in Riga increased in May on average for 1,5%. In May there was observed the price increase in all the housing estates of Riga. The highest price increase in May was observed in Zolitūde, where the average price increase was 2,6%. In its turn the lowest price increase was established on Ķengarags and Bolderāja (0,4%). The prices for the apartments continue to increase from September 2009 and by this moment they have increased on average by 23,4%. The prices for standard-type apartments increased on average for 15,4% from the beginning of 2010. The highest price increase during the first five months of 2010 was established on Jugla, Zolitūde and Āgenskalns – 18%. In its turn the smallest price increase was observed in Pļavnieki – 11%.

 

In May there essentially increased the number of the offered proposals. In comparison with April, when the increase was 0,2%, in May the increase is valuated as significant – 12,4% and it affects on the general price level. The number of proposals has been already increased for the fifth month by turn.

 

The average standard-type apartment price in May 2010 increased till the level of 601 EUR/m². In comparison with the prices of July 1, 2007 when there was the highest price level for non-renovated standard-type apartment of 1620 EUR/m², nowadays the prices are lower for 62,9% on average. In its turn, the comparison of prices with January 1, 2009 the average non-renovated standard-type apartment price in general shows the decrease by 35,7%.

„The tendencies of price increase and proposals changes during the previous months confirmed the declared forecast in the beginning of the year that standard-type apartments’ prices increase would depend on the offered apartments’ proposals number. The rate of price increase during the first half of this year depends on the proposals increase, as far as the level of inhabitants level and crediting conditions has not been essentially changed during the five previous months.

 

In its turn the offers increase depends on the existing market average price and the rates of prices increase.  During the months when the proposals number was insignificant (for example, in April the increase was 0,2%) there was observed comparatively sharp price increase. As the result of price increase the potential apartments sellers who had decided to wait with selling of the apartment made the decision to sell their property. In its turn the increase of proposals number increases the opportunities of the potential buyers’ choice and wherewithal the rates of price increase are considerably lower.

 

As far as the average price has achieved the level when the potential sellers are ready to sell the apartments we can forecast that the number of offers would not decrease. The rates of price increase during the nearest next months would be essentially lower, in the separate months the average price in some housing estates could decrease. However as soon as the new bank would enter Latvia there is foreseen the beginning of active crediting, as this bank has no bad credit portfolio and crediting by relatively low prices today would have low risk level in future. As the result of that the activities on the real estate market could increase and still turn the further price increase.”