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Thinking about buying a 3-bedroom apartment in the Old Town of Riga? It’s a great area, but you're probably wondering: is now the right time to buy, or should you wait for prices to drop?
And what about long-term investment—should you look into other neighborhoods like Āgenskalns or Mežaparks where property values might appreciate more over time?
In this article, we’ll answer these questions. We know this market quite well - and we have put all our knowledge in the Latvia Property Pack.
Will property prices increase in Latvia in 2025?
Yes, property prices in Latvia are expected to rise in 2025, driven by a combination of economic growth and increasing demand for housing.
Backed by our fresh, in-depth market analysis, we’re confident that Latvia remains an attractive market for both domestic and international investors.
While there are some economic challenges like inflation and potential interest rate hikes, the main drivers behind Latvia’s price growth are expected to persist.
Demand, particularly in urban areas like Riga, continues to outpace supply, making significant price declines unlikely. Additionally, Latvia's strategic location and improving infrastructure continue to attract buyers.
Signals pointing to a property price increase in Latvia
Here are some factors suggesting prices could increase:
The Latvian economy is projected to grow steadily in 2025, boosting consumer confidence and increasing the purchasing power of potential homebuyers, which is likely to drive up property prices.
Urbanization trends are expected to continue, with more people moving to cities like Riga for better job opportunities. This urban migration is likely to increase demand for housing in these areas, pushing prices higher.
Government initiatives aimed at supporting first-time homebuyers and improving housing affordability are expected to stimulate demand, particularly in the lower and mid-range property markets.
Latvia's strategic location as a gateway between Western Europe and the Baltic states continues to attract international investors, increasing demand for both residential and commercial properties.
Infrastructure improvements, such as the Rail Baltica project, are expected to enhance connectivity and accessibility, making certain areas more attractive to buyers and potentially increasing property values.
The rental market in Latvia remains strong, with high demand for rental properties, particularly in urban areas. This trend is likely to attract more investors to the property market, driving up prices.
A limited supply of new housing developments, particularly in high-demand areas, is expected to continue, leading to increased competition among buyers and upward pressure on prices.
Signals pointing to a property price decrease in Latvia
Here are some factors suggesting prices could fall:
Rising inflation and living costs could strain household budgets, potentially reducing the purchasing power of buyers and dampening demand for properties.
Potential increases in interest rates could make mortgage financing more expensive, discouraging some buyers and potentially cooling the property market.
Economic uncertainties, such as geopolitical tensions or global economic slowdowns, could impact investor confidence and reduce demand for properties in Latvia.
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If property prices go up in Latvia, how much would they increase by?
If real estate prices in Latvia were to rise in 2025, the increase would likely be around 3% to 7% of their 2024 values.
Typically, real estate in emerging markets like Latvia appreciates by approximately 3% to 7% annually over the long term. However, fluctuations can occur depending on factors such as region, season, and property type.
It means that, if you spot a charming 2-bedroom apartment in Riga for 150,000 euros today, don't be surprised if it's priced between 154,500 and 160,500 euros this time next year.
To give you a better understanding, here is a table that shows 7 types of Latvian real estate properties, their estimated prices in 2024, and projections for 2025 based on potential price increases of 3%, 5%, and 7%.
| Type of Property | Average Price in 2024 (€) | Price in 2025 (3% increase) | Price in 2025 (5% increase) | Price in 2025 (7% increase) |
|---|---|---|---|---|
| Apartment in Riga (60 sqm / 646 sqft) | €150,000 | €154,500 | €157,500 | €160,500 |
| Modern Apartment (75 sqm / 807 sqft) | €200,000 | €206,000 | €210,000 | €214,000 |
| Luxury Penthouse (100 sqm / 1,076 sqft) | €500,000 | €515,000 | €525,000 | €535,000 |
| Studio (30 sqm / 323 sqft) | €75,000 | €77,250 | €78,750 | €80,250 |
| Loft (80 sqm / 861 sqft) | €250,000 | €257,500 | €262,500 | €267,500 |
| Townhouse (150 sqm / 1,615 sqft) | €400,000 | €412,000 | €420,000 | €428,000 |
| Investment Property (50 sqm / 538 sqft) | €100,000 | €103,000 | €105,000 | €107,000 |
Everything you need to know is included in our Property Pack for Latvia
If real estate prices go up in Latvia, which areas are likely to see the biggest increases?
Today, people who want to move to Latvia want the charm, but they also want modern conveniences and vibrant social scenes, which Old Riga delivers. Hence, we could see a price increase there in 2025.
Also, lately, there's been a shift toward more youthful, vibrant neighborhoods, and Miera iela has really taken off.
We like it when information is clear and easy to digest. So, here’s a table that highlights the areas where prices might rise the most, along with the reasons behind those expected increases. It’s very high-level. If you want more details on a specific area, please check our real estate pack tailored to the Latvian market.
| Neighborhood | Level of Increase | Why |
|---|---|---|
| Old Riga | High | Recent development of luxury housing projects and its increasing appeal to international buyers as travel normalizes post-pandemic, driving demand. |
| Āgenskalns | High | Expected rise due to limited housing stock, upcoming renovations to heritage buildings, and growing demand for prime properties in central Riga. |
| Teika | Medium-High | Ongoing gentrification and new transport links, along with several planned redevelopment projects in the area, are likely to push prices higher. |
| Skanste | Medium | The shift towards hybrid workspaces is driving demand for residential properties near business districts, combined with new mixed-use developments. |
| Mežaparks | Medium-High | Eco-friendly urban projects and recent construction of new schools and parks are increasing its attractiveness for families, pushing prices upward. |
| Pārdaugava | Medium | Investment in local infrastructure, such as the extension of tram lines and renovation of historic areas, is boosting long-term value. |
| Miera iela | Medium-High | With new cultural and commercial spaces being developed, this trendy neighborhood is seeing increased demand from both residents and investors. |
| Ziepniekkalns | High | Upcoming large-scale urban regeneration projects and improved public transport access are expected to make this area more desirable. |
| Jūrmala | Medium-High | Its proximity to Riga, along with new office and residential developments, makes it increasingly attractive to professionals seeking more space. |
| Purvciems | Medium | Gentrification and cultural regeneration projects are attracting new residents, leading to rising prices as the area becomes more fashionable. |
| Bolderāja | High | As new luxury developments are launched, demand for premium housing among wealthy buyers is expected to further increase property values. |
| Vecāķi | High | Upcoming restoration of historic sites and high-profile cultural projects are driving a renewed focus on this coastal, scenic location. |
If I'm looking to invest in real estate, what types of properties should I focus on for the best value appreciation in Latvia?
In 2025, Latvia's real estate trends focus on tech-smart, energy-efficient apartments, larger suburban homes for families, properties with outdoor spaces, and eco-friendly buildings—all driving higher demand and prices. Here is a summary.
- Tech-Equipped and Energy-Efficient Apartments:
Driven by remote work and sustainability trends, these homes offer smart technology features and energy-saving systems. They cater to young professionals and tech workers, making them a hot commodity in 2025, especially in cities like Riga.
- Family-Sized Apartments in Suburban Areas:
With a growing demand for larger living spaces, especially among families, suburban areas near Riga and other major cities in Latvia are seeing increased interest. Proximity to green spaces and schools is a major factor driving value.
- Properties with Outdoor Spaces:
Post-pandemic, outdoor spaces like terraces, balconies, or gardens have become highly desirable. In cities like Riga, these features offer a much-needed escape and are likely to drive up property values.
- Eco-Friendly Buildings with Low Carbon Footprints:
Latvia's commitment to sustainability is boosting demand for eco-certified buildings. Buyers are increasingly valuing properties that align with the country's green goals, leading to price appreciation in this category.
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