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Rental housing market demand 3-4 times greater than the supply

  • With the onset of summer the demand for private homes for rent located at Mārupe, Babīte, and Ķīpsala has increased, but this sector is dominated by vacuum in the supply.


Rental housing market demand 3-4 times greater than the supply

With the onset of summer the demand for private homes for rent located at Mārupe, Babīte, and Ķīpsala has increased, but this sector is dominated by vacuum in the supply. "Demand exceeds supply 3-4 times, while the market is dominated by houses, which have been offered for rent for several years, and which are not inhabited and furnished", informs Ms Līva Jaunozola, Head of the Rental Department of ARCO REAL ESTATE. Because new residential construction has virtually stopped now (except in cases where the owner builds a house for himself), we forecast that also in the next year this sector of private houses for rent will not develop and rents will rise as the house construction costs still are not cost effective in relation to the potential rents that might be received for hiring out a private house. Market situation would change in the case of completion, improvement and lease of the private property confiscated by banks. Predominantly, a tenant of a private house enters into lease contract for 3-5 years and wants to rent this property in the long run; it is also one of the reasons why the private house supply is so small.

 

Situation with properties for rent in Jūrmala during the summer season does not differ from previous years - all the attractive and high-quality properties were booked already at the end of the last year / earlier this year, or the tenant has booked the property and paid for several seasons in advance. The price range has no logical connection with the economic situation in the country.

 

As to rental apartments in the Riga city centre - everyone knows that in August / September there is expected influx of foreign students, when 2-3 bedroom apartments in the centre of Riga and the Old Town will be highly demanded. We have seen that already now a lot of students want to reserve apartments for September, but the free apartment owners are not interested in rental of their apartments only from September. "We invite the owners of apartments with existing lease agreements that will expire in September, to inform their real estate agents on apartments available from August / September, as we now have many customers that would like to enter into a tenancy agreement with effect from September", says Ms L.Jaunozola. It is observed that also students, who already live in Riga, want to change their existing residence to other, but in most cases they also have leases expiring in September; this fact limits the hiring of a new property. Recommendation for property owners who currently rent an apartment to foreign students – ask your tenants whether they plan to extend their leases in September and, if not, offer your property for rent now because it is really a lot of customers who want to rent property just from September. "The current situation has pressed the "brake pedal" for normal course of rental business, therefore, we look forward to responsiveness of apartment owners so that it would be possible for new tenants to find apartments for rent already now, while landlords would have new tenancy agreements for the years 2012/2013 already in the beginning of this summer", informs Ms L.Jaunozola.

 

Taking into account that summer is an active tourist season, it has been observed that those owners, who, however, agree to rent their property on a long-term basis from August/September, offer their apartments for a short-term rent before onset of those months. Also this is a solution, how to earn sometimes even double the rent during the summer season, and to rent the apartment to foreign students on a long-term basis from September.

 

Additional information:

Līva Jaunozola

Tel. No. 2642 4119

e-mail: liva.jaunozola@arcoreal.lv

www.arcoreal.lv


18.06.2012.

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