As housing prices and loan payments rose faster than wages in 2022, affordability has slightly declined for buyers. However, overall housing affordability in Latvia is still historically high. In the apartment segment, the price per square meter in Latvia remains significantly lower than in Lithuania or Estonia. For example, in the secondary market, the average price per m² in Latvia is €1200, compared to €2400 in Lithuania and €2600 in Estonia. One reason for this large gap is that Latvia still lags far behind neighboring countries in terms of the proportion of renovated buildings.
“Although buyers are considering real estate purchases very seriously, the market is recovering after a downturn that began last autumn and continued through the past winter. Forecasts show that a drop in Euribor rates is unlikely until at least the end of this year, and some buyers are not willing to postpone their decisions that long. Especially since the market’s future is difficult to predict. As a result, people are looking for ways to reduce their monthly loan payments — for example, by opting for longer mortgage terms or switching to smaller and more affordable apartments, including renovated and quality flats in Soviet-era buildings,” explains Ritvars Sebris, owner of “AVER Real Estate”.
More apartments on the market in every segment, but number of transactions is down
Current trends show that the number of available properties is increasing not only in Soviet-era buildings but also in other apartment segments. For example, in Riga, the number of listed apartments has increased by more than 33% since the beginning of the year, and on average, an apartment is sold within three months. According to land registry data, the number of property transactions in the first half of this year compared to the same period last year has fallen by 9% in Riga and by as much as 23% in the surrounding area.
In recent months, Riga has seen a drop in prices for apartments in Soviet-era buildings, which remain the most popular among buyers. This price decrease is driven by several factors, including an increasing number of such properties on the market. If an apartment in a Soviet-era building was once bought as an investment, many owners now want to sell, as further price growth for these apartments is unlikely in the near future.
Cheapest apartments are in Lithuanian-type and Khrushchyovka-style buildings
Among Soviet-era flats, the most in-demand and expensive are apartments in the 119th and 104th series buildings. The cheapest, according to data available on cenubanka.lv, are those in Lithuanian-type buildings, small family buildings, and Khrushchyovka (Khrushchev-era) projects. Four-room and unrenovated apartments are the least purchased in these buildings, while the most activity is seen in the 2–3 room, renovated segment — especially in neighborhoods like Āgenskalns, Teika, Imanta, as well as Purvciems and Pļavnieki.
“AVER Real Estate” has observed that buyers of Soviet-era apartments are becoming more informed: whereas in the past, only the apartment’s interior condition mattered, buyers now also research the strengths and weaknesses of each building type, the general condition of the structure, and whether it has been or is planned to be renovated.
More renovated buildings in Latvia’s regions than in Riga
Whether a building has been renovated is easy to tell by its appearance and heating bills. If full renovation has been carried out, the building will have a modern facade, renovated stairwells, replaced plumbing and heating systems, a new roof, and new entry doors. Between 2009 and the end of 2021, around 1,000 multi-apartment buildings were renovated in Latvia, which is a very small number according to economists at the Bank of Latvia. For comparison, the “Long-Term Building Renovation Strategy” in Latvia aims to renovate at least 8,100 buildings by 2030 — eight times more than in the previous period. Furthermore, data from the Ministry of Economics shows that the proportion of renovated buildings is higher in Latvia’s regions than in Riga.
“Despite the available state and EU support, renovation projects for Soviet-era buildings in Riga and its surroundings have only recently gained momentum. Renovation costs usually appear as an additional item on the monthly utility bill. When buying an apartment in a renovated building, the buyer takes over the remaining loan obligations related to the renovation. Therefore, it’s important to inquire about the terms and amount of the renovation loan for each apartment,” explains Ritvars Sebris.
If you’re considering buying a flat in a particular Soviet-era building that has not been renovated, it’s important to conduct a deeper investigation. Contact the building manager and talk to neighbors. From the manager, you can learn about past and planned repairs, the building’s overall condition, and how active and cooperative the residents are. The total building debt — usually visible in the maintenance bill — is also an important indicator of whether residents are likely to invest in improvements in the future. If the manager refuses to provide this information to outsiders, the seller can act as an intermediary.
Note that if you want to renovate the building using support from ALTUM, a 50% + 1 vote majority of residents must agree.
Banks still generally offer loans for Soviet-era flats, but buyers should expect a larger down payment — typically 15–20%. In contrast, for new projects supported by ALTUM, the down payment may be as low as 5%.
