View of Riga, Latvia from St Peter’s Church [Photo credits to Azmuskoka on Flickr]
Latio, Latvia’s biggest real estate company reports that Riga property prices have now fallen in two successive months; the outlook for prices in the short-term does not look good. The latest of Latio’s excellent series of monthly reports on the Greater Riga property market shows a decline of 3.5% in the price of ‘standard’ apartments in the region, which follows on from a 1% decline in May. This is an abrupt turnaround from earlier in the year, which saw Riga posting a 44.23% rise in prices in the 12 months to Q1.
Lativa has entered a tricky phase in terms of credit ratings (down in February), current account, cost of living (rising more sharply since the Spring), exchange rates and interest rates. The value of Latvia’s currency, the lats, is pegged to the euro but the Bank of Latvia has had to increase its interbank rate steeply this year and fluctuations in interest rates have been severe; the (6 month offered rate) level is currently 7.36%.