Investment Potential
Property markets throughout the world have seen falls, sometimes after spectacular gains as in Riga. Does this mean they will never recover to give investors good returns once again. Of course not, we just won't see the amazing short term appreciation that we saw in Riga and other european markets. I know that property is the best long term investment there is and I know that Latvian property still has some way to go to attain it's rightful place in the european pecking order.
Riga is considered the capital of the Baltic countries and is on the edge of the EC where the new western european border meets Russia. Riga's Russian connection is often not understood or valued by many, but spend a little time at the Russian border crossings and witness the large queues, up to a staggering eight kilometres long of wagons travelling both ways and the Russian freight trains of 150 wagons bringing goods to the EC to realise the importance of Latvia and Riga in particular as a gateway to and from the east.. Throughout history gateways have prospered.
Riga Airport Investment
Riga airport currently covers 37 thousand square metres and has an annual passenger throughput of five million.
Work has begun to increase this to 137 thousand square metres with an anticipated 10 to 12 million passengers within five years and an incredible twenty million within ten years.
A new airport industrial park is planned with proposed new jobs for ten thousand prople. Four hundred million Euros of private investment is already in place for this project.
Land prices near the airport have seen a dramatic increase, bucking the current downturn
(courtesy of: NewProject.lv)
The Future
Where will these hordes of new visitors go and why will they come? What combination of tourist and business people will they be? Will they travel further afield or stay in Riga? Of course no one yet knows. The Latvian countryside contains many untapped tourist locations, known only to locals and visitors from Scandinavia and Germany. There are over three thousand freshwater lakes and rivers - an anglers paradise. There are already cheap flights from many european locations to Riga, will there be more and will the influx of new visitors actually materialise in the expected timescale? Well, the economists don't often make perfect predictions but however sceptically we look at it, it does show confidence in the future. I believe the Latvian longer term future looks bright and that property prices are still relatively low with good medium to long term gains to be made.
European Property Prices early 2007
Riga
Tallin
Vilnius
Warsaw
Prague
Bratislava
Budapest
Ljubijana
Zagreb
Belgrade
Sofia
Instanbul
Londom
Dublin
Paris
Berlin
Brussels
3500
2500
3500
3500
3000
2000
2250
3250
2500
2250
1250
2500
14000
6750
7000
3200
3000
These prices in Euros per square metre for quality city centre apartments were roughly correct at the start of 2007. It is not the price that's important but the order of importance as a city of business & trade. Riga is joint fourth in order of price, but where should it be in order of importance as a business and trade centre? To place it, you really need to know about the property and business culture in each city. (google is a very good starting point). I would put Riga around fourth or fifth. Riga has so much more going for it as a trade & business centre than some other european capitals. Time will tell - will Riga once again become the Baltic Tiger - for a slightly different reason? My money is most definitely on this outcome.
Riga Prices late 2008 ...
Prices have of course fallen since early 2007 but not by a uniform amount across all types.
One very well known large real estate valuation company will not value any new build project outside the immediate centre of Riga above 1,000 Euros per m2. Others are more realistc and optimistic. One large developer will not reduce his quality new build property below 3k Lats/m2. Two ridiculous extremes.
Generally new build prices are around 2k Euros/m2, a little higher for higher quality central apartments.
Prices for older soviet series apartments have seen the biggest reduction... these are now showing high rental yields!
Older quality city centre apartments have seen the lowest reduction in price.
Please note that the information on this website is not regulated financial advice, which recommends any specific course of action.
Property values can of course decrease as well as increase. No express or implied income claims are made on this website. Riga Property Services HVS take all reasonable efforts to ensure the information published on this website and communicated elsewhere, written or verbal is accurate, current and complete in every respect at the date of publication or communication. However no warranties, guarantees or representations are made or implied as to it’s accuracy.
