latvia property market sees increasing demand
News Posted On: 13 October 2011
Demand for property in Latvia is increasing. The number of property purchases throughout the country increased by 5.3% in the year ending July 2011, and there has been a substantial increase in demand for property from foreigners. Recent amendments to immigration laws introduced in July are thought to be at least partly responsible for the increase.
Much of the demand has come from Russia, as buying property in Latvia helps them to secure residency, which is seen as being an attractive option due to political uncertainty. Anyone investing between LVL50,000 and LVL100,000 in property in the Riga Planning Region, or at least LVL200,000 in a Latvian credit institution, or LVL25,000 in the equity capital of a company registered in Latvia, followed by another LVL20,000 within 12 months, is able to apply for permanent residency. In the last nine months this new law has seen a total of 192 residency permits being issued, and 128 foreigners have been granted permanent residency, up from 55 in 2010.
Latvia was hard hit by the recession; its economy contracted by 18% in 2009, and its unemployment level is the highest in the EU. However there is considerable confidence that the economy is recovering, and 3.5% growth is predicted for this year. Latvia also has a €7.5 billion standby loan from the EU and IMF, and more than €3.3 billion was used to pay public sector wages and to maintain essential services.
Latvia currently has a considerable oversupply of properties, but Russians are buying up unfinished property developments and land, as prices are around one third of peak values and are seen as being a bargain. The number of transactions has been increasing steadily since late 2009.
View property for sale in Latvia
Written by Les Calvert
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