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Along with an increase in the private house sector activity, the number of transactions with single family detached homes in Riga and its vicinity increased by 2.7% in 2014. As stated in the private house market overview prepared by ARCO REAL ESTATE, a positive trend was also observed in construction of private houses, where, compared to three quarters of the last year, the number of building permits issued increased by 3.5%.
Mr. Māris Laukalējs, Member of the Board of Director of ARCO REAL ESTATE, reveals that the increase of activity was not reflected in significant price changes, since the price level in whole remained at the level of the previous year. The only segment, which in 2014 experienced significant changes, was the segment of exclusive private houses: both in Riga and the vicinity of the city the interest in and, consequently, the number of transactions with such properties decreased, which resulted in a fall in this segment prices.
Observations show that in 2014, the highest demand was for high-quality private houses in Riga, built in the last two decades, with an optimum space area (150 - 250m²) and developed neighbouring infrastructure. In addition to the observed demand and the small price increase this private house segment was characterized by a limited supply, says the expert.
In the three quarters of this year, the construction costs rose by 0.8%, which was approximately the same as in 2013, when the total annual increase was 1.2%. Notwithstanding the fact that the increase of the construction costs was not big, it still exceeded the private house price growth. Due to this, development of new private houses and villages has become even less attractive, coments Mr. M. Laukalējs.
As stated in the overview prepared by ARCO REAL ESTATE, despite the fact that in 2014 the average amount of transactions with private houses in Riga was by 16.6% lower than in the previous year, it did not show a fall of private house prices in general. The fall of the average amount can be explained by the fact that this year, the number of transactions with exclusive private homes significantly decreased.
10.12.2014.