In Riga and Pieriga, 53% of all real estate transactions have taken place specifically in Soviet-era buildings, while only a quarter were in new developments, according to data compiled by the real estate agency “AVER Real Estate.” On average, it takes about three months to sell an apartment in Riga or Pieriga. Currently, the most in-demand and expensive properties are apartments in the 119th and 104th series buildings.
As housing prices and loan payments rose faster than wages in 2022, housing affordability for buyers has slightly declined. However, it still remains at a historically high level overall, and in the apartment segment, the price per square meter in Latvia is still significantly lower than in Lithuania or Estonia. For example, in the secondary market, the average apartment price per m² is €1200 in Latvia, compared to €2400 in Lithuania and €2600 in Estonia. This large price difference is partly explained by the fact that Latvia significantly lags behind its neighbors in the share of renovated apartment buildings.
“Although buyers are considering real estate purchases very seriously, the market is showing signs of recovery after the decline that began last autumn and continued through the winter. Forecasts indicate that a drop in Euribor rates is not expected until at least the end of this year, and some buyers are not willing to wait that long to make a decision. Especially considering that future market conditions are difficult to predict. As a result, people are looking for ways to reduce their monthly mortgage payments — for example, by choosing longer repayment periods or switching to smaller and more affordable homes, including renovated and high-quality apartments in Soviet-era buildings,” explains Ritvars Sebris, owner of “AVER Real Estate.”
More Apartments Across All Segments; Fewer Transactions Overall
Current trends show that the number of available properties on the real estate market is increasing, not only in Soviet-era buildings but also in other apartment segments. For example, in Riga, the number of available apartments has increased by more than 33% since the beginning of the year, and apartments are typically sold within about three months. Overall, according to land registry data, the number of real estate transactions in the first half of this year compared to the same period last year has dropped by 9% in Riga and by 23% in Pierīga.
In recent months, a decline in real estate prices has been observed in Riga’s Soviet-era apartment buildings, which are the most in-demand among buyers. This price decline is driven by several factors, including the growing number of such apartments on the market. If a Soviet-era apartment was previously bought as an investment, many owners now wish to sell, as no further price increase is expected in the near future.
The Cheapest Apartments Are in Lithuanian and Khrushchev-Era Buildings
Among Soviet-era apartments, the most in-demand and expensive are those in the 119th and 104th series. The cheapest, according to data from cenubanka.lv, are found in Lithuanian-type buildings, small family buildings, and Khrushchev-era projects. The least purchased apartments in Soviet-era buildings are four-room units and unrenovated flats. The highest activity is in the segment of 2-3 room renovated apartments, with especially high transaction numbers in neighborhoods like Āgenskalns, Teika, Imanta, Purvciems, and Pļavnieki.
Observations from “AVER Real Estate” show that buyers of Soviet-era apartments are becoming increasingly knowledgeable: whereas previously they focused only on the apartment’s condition, now they are also researching the pros and cons of specific series, the overall condition of the building, and whether renovation has been done or is planned.
More Renovated Buildings in Latvia’s Regions Than in Riga
Whether a building is renovated can be easily determined from its exterior appearance and heating bills. A fully renovated building typically has a modernized facade, renovated stairwells, replaced pipelines, a modern heating system, a new roof, and new entry doors. In total, from 2009 to the end of 2021, approximately 1,000 multi-apartment buildings were renovated in Latvia, which is a very small number according to Bank of Latvia economists. For comparison, the “Long-Term Building Renovation Strategy” for Latvia aims to renovate at least 8,100 buildings by 2030 — eight times more than during the previous period. Additionally, data from the Ministry of Economics shows that the percentage of renovated buildings is higher in Latvia’s regions than in Riga.
“Despite available support from the state and the EU, renovation projects for Soviet-era buildings in Riga and its surroundings only started to gain momentum relatively recently. Renovation costs usually appear as an additional item on the monthly utility bill from the building manager. When purchasing an apartment in a renovated building, the buyer assumes 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 an apartment in a specific Soviet-era building that has not been renovated, it’s crucial to do deeper research — for example, by contacting the building manager and speaking with neighbors. The manager can provide information on past and planned renovations, the overall condition of the building, and the level of resident engagement and cooperation. The total amount of debt for the building — usually visible in the utility bill — is a key indicator of how willing residents are to invest in future improvements. If the manager is unwilling to provide this information to an outsider, the seller can act as an intermediary. It’s worth noting that for a building to be renovated with ALTUM support, approval from 50% + 1 of the residents is currently required.
Observations show that banks are still willing to provide loans for Soviet-era apartments, but buyers should be prepared for a higher down payment of 15–20%. In contrast, for new projects with ALTUM support, the down payment can be as low as 5%.
