-
Early September has clearly pointed out the residential rental market shortages, as the huge demand for quality housing has exceeded the supply. As indicated by Mr. DZINTARS BĒRZIŅŠ, Head of the Rental Department of ARCO REAL ESTATE, beginning of the school year, when the demand for apartments in Riga among local and foreign students is particularly strong, distorts the rental market, raising prices and creating long lines of persons wishing to rent an apartment.
Foreign students when choosing residence for study period prefer high-quality apartments in the Old Town. The students explain the great demand for apartments in the Old Town by the beneficial location with a lot of entertainment and transport facilities, as well as the level of security, completely excluding any desire to look for a residential space in housing estates. While servicing this customer group it has been noted that one student's budget for the rent of housing is 300 euro and the student wants to have a furnished apartment with amenities with separate rooms for this money. When several foreign students rent an apartment jointly, their total monthly budget can be up to 1000 euro which is several times higher than amount that can be paid by a local tenant, highlights Mr. Dz. BĒRZIŅŠ.
Although the residential rental market activity caused by the influx of foreign students began already in early June, when interested parties had greater choice and more attractive prices, the number of apartment seekers in September only increased. Ms Simona Gurbo, Foreign Relations Organizer of the Riga Stradiņš University, acknowledges: “Foreign students commence their studies in September, however, only few of them have found a residence place in good time. In early September, only 20% of foreign students had found a permanent residence for their study period.”
The shortage in the residential rental market has been caused also by the significant demand for apartments with the monthly rent of up to 2500 EUR. Embassy staff, top managers of large business companies and foreign citizens who have moved to Latvia for residence, constitute the segment of customers who are looking for apartments in the central part of Riga or in a more quite location – the quiet centre of Riga. Features characterizing the demand show that such persons need high-quality furnished apartments with well-maintained staircase and car parking facilities. “Market trends indicate that such properties are more and more seldom launched in the rental market, since they most frequently are rented out for a long-term period thus making the above-mentioned shortage,” tells Mr. Dz. Bērziņš.
Despite the high demand for apartments, this year brought no positive impact on the private house rental market as compared to previous years. Activity is clearly reduced due to high prices, says Mr. Dz. Bērziņš. Also the fact that private homes are being rented out for a long-term period do not contribute to increase of the number of such private houses in the rental market, the price of which would be acceptable to tenants. The rent payable for a high quality house with 300 m² living space currently is around 2500 EUR per month, which is a high price that only a few persons can afford, although there are a lot of persons wishing to live in a private house. Consequently, it is possible to develop an economic private house rental market, where the potential price would be between 1000 and 1300 EUR. This year's trends show that the greatest demand for rental of private houses is the left bank of the Daugava River - the most demanded areas are Mārupe, Piņķi and their surroundings.
23.09.2013.