Analytics, Latvia, Real Estate

The largest reduction in prices was for apartments in Soviet-era apartment buildings in Riga's suburbs – by 55 to 60% when compared to the second quarter of 2008, and by 35 to 40% when compared to January 2009.

At the same time, the portal emphasizes that real estate prices are not dropping as rapidly as they did in the first quarter of the year.

According to "City24", at the moment, the biggest problem for buyers and sellers is the current policy of banks for persons wishing to obtain mortgage loans. Most of the current real estate deals are done by people using their savings, instead of taking out loans like previously.

In the second quarter a portion of sellers refrained from offering properties to buyers, waiting for the economic situation to improve. With the reduction in the purchasing power of residents, as well as problems repaying loans, most of the real estate deals that took place in the second quarter of 2009 were forced, as sellers were forced to sell their properties to make ends meet.

The most active segments of the real estate market in the second quarter of 2009 were the commercial and apartment rental markets. Many companies, in reducing expenditure, moved into smaller and cheaper office or store spaces. The rental prices for commercial properties have almost reached the lowest possible point.

There have been substantial changes within the land and private home markets. There has been a fourfold reduction in the number of private home deals, whilst the price of private homes has reduced by around 40%. Similar trends are in the sale of land as well.

As "City24" predicts, real estate prices in all segments should stabilize in the third quarter of the year.

"City24" belongs to Finnish media concern Alma Media.