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The most demanded apartments are those situated in pre-war time houses in the central part of Riga
Non-residents investing in Latvia wishing to preserve their capital because of the possibility of economical crisis
Currently, the real estate purchase option in Latvia for non-residents is interesting not only for investment purposes, but, in many cases, also for obtaining a residence permit and, consequently, the possibility of free movement within the Schengen countries. Latvian residence permit opens up a whole range of opportunities, for example, to enter and leave the country at any time (and, unlike a number of European countries, there is no limit as to the length of period of stay in the country), to work, to get education, to use a wide range of medical and public services, to issue invitations to relatives and friends, to move freely within the Schengen countries, etc.
“In most cases, decision on the purchase of real estate is well considered and thought out, because after reviewing the real estate purchase offers and benefits in different countries, it is found that in Latvia there are a number of advantages”, informs Ms. Oļesja Bogodistaja, Head of the International Department of ARCO REAL ESTATE.
When buying an apartment in order to obtain residence permit, the most demanded apartments are those situated in pre-war time houses in the central part of Riga or in new buildings in different districts, with area from 60 to 100 m²; houses with a land plot are demanded not so frequently. Most buyers want to buy a ready-renovated property, preferably furnished.
The most popular budget for investment in real estate with the purpose of obtaining a residence permit is from 150,000 to 220,000 euros. Slightly less, but also sufficiently popular budget is from 220,000 to 300,000 euros. When purchasing property in the range from 300,000 to 600,000 EUR, in most cases there are several buyers who buy property together and act as co-investors. Often, they are family members with adult children.
“There is also demand for commercial facilities in the market, including demand for historical buildings in the central part of Riga, with the purpose of reconstruction and renovation of the buildings and further rental or sale of apartments. Also retail and restaurant facilities in locations with intensive flow of visitors are highly demanded. Experienced investors evaluate profitability of this segment and are looking for the best deals”, informs Ms. O.Bogodistaja
Main reasons of the growing interest among non-residents in commercial properties in Latvia are as follows:
- Political instability in their home countries,
- The desire to obtain a residence permit and legalize their income in a European country,
- A safe place for the family in a European country with the possibility to get education and communicate in Russian,
- The desire to preserve capital taking into account the possibility of financial instability and global economic crisis.
Latvia offers a wide range of favourable conditions for business activity. For the first, the country's favourable geographic location – in the crossroads of European trade ways, where the existing ports are successfully used in order to obtain profits from the export - import operations. Today, foreigners invest in various Latvian industries, preferring finance operations, production of food, hotel business and service sector.
The amount of investments made by foreigners in the Latvian economy in order to obtain a residence permit, exceeded 336 million LVL at the end of January 2012, including almost 265 million LVL invested in real estates.
During the period from July 1, 2010 till the end of January 2013, there were submitted in total 2308 applications for a residence permit (127 applications in 2010, 836 applications in 2011, 1225 applications in 2012 and 120 applications in 2013), of which 1,855 applications were submitted on the basis of the applicant's real property. As it is known, on the basis of ownership of real property, a residence permit can be obtained by the investor, his/her spouse and their minor children. In total, 5438 persons have submitted application for residence permit (4383 persons - based on the ownership of real property), and the residence permit was issued to 5080 persons (including 3098 persons – on the basis of the ownership of real estate).
The total amount of investment in real estates is LVL 265,863,101 (EUR 378,288,982) compared to the total amount of investment, accounting for LVL 336,715,595 (EUR 479,103,128). In order to obtain a residence permit, the total of LVL 58,614,543 (83,400,981) has been invested in the subordinated capital of Latvian banks. In addition, the total of LVL 12, 238,042 (EUR 17,413,165) has been paid by investors in the share capital of Latvian enterprises. At the beginning of 2013, the number of countries, citizens of which are interested in the possibility of obtaining Latvian residence permits reached 40. Among them are such countries as the Dominican Republic, Philippines, Vietnam, Nigeria, Serbia, Afghanistan, Iran, Dagestan, USA, China, Lebanon, Egypt, Sri Lanka, Iran, Australia, and Korea.
Since July 1, 2010, the most popular locations as to obtaining residence permit on the basis of ownership of property in Latvia were Riga (862) and Jūrmala (552). Also Babīte (53), Ozolnieki (50), Mārupe (28), Cēsis (25), Saulkrasti (21), Amata (17), Garkalne (17), Ādaži (10), Carnikava (8), Iecava (7), Amata Municipality (6), Madona (5) and other places have been popular.
Applications for residence permit for the same period were submitted by citizens of Russia (3760), Ukraine (446), Kazakhstan (298), Uzbekistan (171), China (136), Belarus (129), Azerbaijan (57), Israel (24), USA (23), Kyrgyzstan (21), Georgia (16), Dagestan (12) and other countries.
From July 1, 2010 a Latvian residence permit for up to 5 years (with an option of prolongation), based on ownership of real estate, can be obtained by purchasing property in Riga or Riga district at a price not lower than LVL 100 000 (EUR 142 888) but in the other largest cities of the country - at a price that is not less than LVL 50 000 (71 144 EUR).
Additional information:
Ms. Oļesja Bogodistaja
ARCO REAL ESTATE International Department Head
Tel. 2868 8666
olesja.bogodistaja@arcoreal.lv
13.02.2013.