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Latvia's property market shows strong momentum as we reach mid-2025, with new housing prices jumping 11.4% year-over-year while secondary housing dipped slightly by 2%.
The Latvian real estate market has experienced dramatic growth over the past decade, with current housing prices standing 97.6% higher than 2015 levels. Premium segments in Riga and Jūrmala recorded their highest transaction volumes in four years during Q1 2025, reaching €105 million.
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Latvia's property prices are rising moderately in 2025, driven by declining interest rates and strong demand for new, energy-efficient housing.
While new dwelling prices surge 11.4% annually, the overall market shows sustainable growth of 3-4% with experts predicting continued stability through 2026.
| Market Indicator | Current Status | Year-over-Year Change |
|---|---|---|
| Overall Housing Prices | €2,640/m² (Riga average) | +1.1% |
| New Housing | €2,980/m² (advertised) | +11.4% |
| Secondary Housing | €848/m² (Riga apartments) | -2.0% |
| Premium Market Activity | €105 million (Q1 2025) | Record 4-year high |
| Price vs 2015 | 97.6% higher | Nearly doubled |
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
What are the current average property prices across Latvia in June 2025?
Property prices vary significantly across Latvia, with Riga commanding the highest rates while regional cities offer more affordable options.
In Riga, the capital city, average apartment prices stand at €848 per square meter for existing properties, while new developments in the primary market reach €2,980 per square meter for advertised prices. Actual transaction prices for new projects average €2,640 per square meter.
Regional cities show much lower price levels. In Jelgava, apartment prices range from €183 to €2,096 per square meter, while Daugavpils offers the most affordable options with apartments between €222 and €475 per square meter.
The premium segment in Riga and Jūrmala has shown particular strength, with properties above €1 million attracting steady demand from both local and international buyers.
Overall, Latvia's residential property market displays a clear price hierarchy, with the capital region commanding premium rates while secondary cities remain accessible to budget-conscious buyers.
How much have Latvian property prices increased in the past 12 months?
Latvia's property market shows mixed performance over the past year, with new housing significantly outpacing existing properties.
According to the Central Statistical Bureau, nationwide house prices rose by 3.66% during the year to Q1 2024. The latest data from June 2025 indicates that overall housing prices increased by 1.1% year-over-year, reflecting a moderation in growth rates.
New housing has been the star performer, with prices jumping 11.4% compared to a year ago. This surge reflects strong demand for modern, energy-efficient properties that meet contemporary living standards.
In contrast, secondary housing fell in price by 2%, indicating a shift in buyer preferences toward newer constructions. The real residential property price index growth reached 4.371% in September 2024, showing recovery momentum in the latter half of 2024.
Quarterly data reveals fluctuating growth patterns: 5.87% in Q1 2024, 5.38% in Q2, 3.02% in Q3, and 0.82% in Q4, before stabilizing at current levels.
Which Latvian cities are seeing the fastest property price growth?
The fastest property price growth in Latvia is concentrated in premium locations and emerging suburban areas.
Jūrmala leads the growth trajectory, with land sales volume more than doubling compared to 2023. The resort town continues attracting premium buyers, especially for properties exceeding €1 million, driven by its coastal location and exclusive residential appeal.
Riga maintains its dominance with the highest transaction volumes and most dynamic price activities. The capital's premium real estate market recorded €105 million in transactions during Q1 2025 – the highest in four years.
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| City/Region | Growth Driver | Key Market Feature |
|---|---|---|
| Jūrmala | Land sales doubled | Premium coastal properties |
| Riga | €105M Q1 transactions | Capital city premium |
| Pierīga | 50% of new permits | Suburban expansion |
| Jelgava | Wide price range | Affordable alternatives |
| Daugavpils | Lowest prices | Investment opportunities |
The Pierīga region surrounding Riga shows remarkable development activity, accounting for half of all dwelling permits in H1 2024, with permit numbers rising 10.7% and total area increasing 23.8%.
What do property price forecasts predict for Latvia in 2026?
Real estate experts provide cautiously optimistic projections for Latvia's property market through 2026.
Latvia's real estate market is projected to grow by 3.87% annually from 2024 to 2029, fueled by declining interest rates and economic recovery. For 2026 specifically, experts anticipate no major disruptions or significant price fluctuations, suggesting stable and moderate growth.
The key driver will be Euribor interest rates, expected to drop to around 1.95% by the end of 2025, making mortgages more affordable. This could reduce monthly payments by approximately €170 for a €100,000 loan, significantly improving buyer affordability.
Market dynamics will favor energy-efficient properties and green architecture, with buyers increasingly willing to pay premiums for sustainable housing. The focus on local buyers rather than foreign investors creates more sustainable long-term growth patterns.
Industry professionals emphasize that growth will remain moderate rather than explosive, reflecting market maturation and economic fundamentals rather than speculative activity.
Which property types are experiencing the strongest price appreciation?
New dwellings dominate Latvia's property price appreciation, significantly outperforming the secondary market.
New housing prices increased by 11.06% year-over-year in Q1 2024, while existing dwellings rose by only 1.24%. This dramatic difference reflects buyer preferences for modern amenities, energy efficiency, and lower maintenance costs.
The premium apartment market shows particular strength, with new projects comprising 70% of total premium apartment transactions. Energy-efficient properties command the highest premiums, supported by favorable bank financing terms for green buildings.
Renovated buildings with improved energy ratings also perform well, attracting buyers seeking the character of older architecture combined with modern efficiency standards. Compact one-room and two-room apartments remain the most popular choices.
The wooden frame private house segment shows growing interest, though experts advise careful quality evaluation and proper bank financing to ensure secure transactions.
How do current mortgage rates affect Latvia's property market?
Declining mortgage rates are creating favorable conditions for Latvia's property market in mid-2025.
The Euribor rate decrease from 4% to approximately 2% represents a significant shift in affordability dynamics. For a typical €100,000 loan, this translates to monthly payment reductions of around €170, substantially improving buyer purchasing power.
Banks show increased willingness to finance energy-efficient properties at preferential rates, creating additional incentives for buyers to choose newer, sustainable housing options. This financing advantage further drives demand for green-certified buildings.
The improved lending environment has contributed to record transaction volumes in Q1 2025, particularly in the premium segment where buyers can leverage lower rates for larger purchases.
Experts expect continued rate declines through 2025, with Euribor potentially reaching 1.95% by year-end, which should sustain buyer activity and support moderate price growth throughout 2026.
What role does foreign investment play in Latvia's property prices?
Foreign investment continues shaping Latvia's property market, though its character has evolved significantly by June 2025.
Despite geopolitical challenges, accumulated foreign direct investments in Latvia increased by €441 million in 2024, reaching €12.178 billion by January 2025. The exclusion of Russian and Belarusian nationals from the real estate investment program has reshaped the investor landscape.
New investor groups, particularly from the Middle East, increasingly target high-end development projects like the Riga Waterfront. Latvia's residence permit program, requiring €250,000 real estate investment plus a 5% government fee, continues attracting international buyers seeking European residency.
It's something we develop in our Latvia property pack.
The shift from Eastern European to Middle Eastern and other international investors has created more diversified and stable demand patterns, contributing to sustainable market growth rather than speculative bubbles.
How does Latvia's property market compare to Estonia and Lithuania?
Latvia occupies a middle position in Baltic property markets, offering better affordability than Lithuania while showing more moderate growth than Estonia.
Between 2010 and 2024, Estonia led EU housing price increases with 230% growth, while Latvia recorded 154% and Lithuania saw 181% increases. Currently, Lithuania maintains the highest absolute prices among Baltic states, with Vilnius apartments averaging €2,646 per square meter.
Estonia shows the strongest current momentum, with house prices increasing 7.8% year-over-year in March 2025. Latvia's more moderate 1.1% annual growth reflects market stabilization after years of rapid appreciation.
| Country | 2010-2024 Growth | Current YoY Growth | Capital City Price/m² | Rental Growth Since 2010 |
|---|---|---|---|---|
| Estonia | 230% | 7.8% | €2,800-3,200 | 216% |
| Latvia | 154% | 1.1% | €2,640 | Moderate |
| Lithuania | 181% | 2.1% | €2,646 | 183% |
Latvia's balanced position makes it attractive for investors seeking stable returns without the volatility of Estonia's market or the high entry costs of Lithuania's urban centers.
What government policies are impacting property prices in 2025?
Government initiatives in 2025 directly influence Latvia's property market through both supply-side measures and tax reforms.
The European Investment Bank partnership aims to construct 2,260 affordable rental apartments nationwide, potentially moderating price pressures in the rental segment. The "Rental Housing for Latvian Professionals" program targets public sector workers, with 1,129 apartments planned across nine municipalities.
Tax policy changes include a 10% real estate tax on properties owned by sanctioned persons, with 80% of revenues supporting Ukrainian civilians. Personal income tax reforms feature new progressive rates and a 3% surcharge on income exceeding €200,000, affecting high-end property affordability.
These policies create a dual effect: increasing affordable housing supply while potentially cooling luxury segment demand through higher taxation. The focus on energy-efficient construction in government programs reinforces market trends toward sustainable development.
Municipal involvement in affordable housing projects signals long-term commitment to market stability, potentially preventing excessive price appreciation while supporting steady growth.
How has the economic environment affected property demand?
Latvia's economic recovery in 2025 provides solid foundation for property market stability and moderate growth.
With inflation at 3.7% in February 2025 and projections suggesting average inflation below 3% for the year, real estate maintains its appeal as an inflation hedge. GDP growth projections of 1.7% by the European Commission and IMF indicate economic expansion supporting property demand.
Real wage growth enhances household purchasing power, enabling more Latvians to enter the property market. The shift toward local buyers rather than foreign speculators creates sustainable demand patterns aligned with economic fundamentals.
Public investment increases and private consumption recovery underpin market confidence. The combination of moderate inflation, positive GDP growth, and improving household finances suggests continued healthy property demand through 2026.
Economic stability encourages banks to maintain lending activity, while businesses expand operations, driving commercial property demand that indirectly supports residential values.
What are experts saying about long-term property trends?
Real estate professionals express measured optimism about Latvia's long-term property market trajectory as of June 2025.
Industry leaders emphasize the market's fundamental shift toward sustainability and energy efficiency. Aigars Šmits from the Latvian Real Estate Transaction Association highlights how declining Euribor rates substantially improve affordability, predicting sustained buyer activity.
Experts note the market's evolution from foreign investor-driven to local buyer-focused dynamics creates more stable, predictable growth patterns. The premium segment remains robust, with 70% of luxury transactions involving new constructions featuring modern technology and energy-saving features.
Long-term projections suggest 3-4% annual growth through 2029, reflecting market maturation rather than speculative excess. Urbanization trends and sustainable development projects will drive demand, particularly in Riga and surrounding regions.
It's something we develop in our Latvia property pack.
Professionals unanimously agree that energy efficiency will become the primary value driver, with older, inefficient properties facing relative price depreciation compared to green-certified alternatives.
Which areas offer the best investment potential right now?
Several Latvian regions present compelling investment opportunities based on current market dynamics and future growth potential.
The Pierīga region surrounding Riga offers exceptional prospects, accounting for 50% of new dwelling permits and showing 23.8% growth in construction area. Lower prices than central Riga combined with improving infrastructure make this area attractive for both investors and end-users.
Jūrmala's land market, with sales volume doubling year-over-year, presents opportunities for development projects targeting the premium segment. The resort town's limited supply and consistent high-end demand support long-term appreciation.
- Pierīga suburbs - Rapid development, affordable prices, strong permit growth
- Jūrmala coastal areas - Premium market, land scarcity, international appeal
- Riga city center renovations - Energy efficiency upgrades in historic buildings
- Jelgava - Wide price range, university town dynamics, growth potential
- Daugavpils - Lowest entry prices, potential for significant appreciation
Energy-efficient new developments in any location offer the best prospects, benefiting from buyer preferences, favorable financing, and likely outperformance of older stock.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Yes
Latvia's property market demonstrates positive momentum in June 2025, with overall prices rising moderately while new housing shows strong 11.4% annual appreciation. The market benefits from declining interest rates, steady economic growth, and sustainable demand from local buyers rather than speculative foreign investment.
While growth rates have moderated from previous years' rapid increases, the fundamentals support continued appreciation through 2026 and beyond. Expert projections of 3-4% annual growth, combined with government support for affordable housing and focus on energy efficiency, indicate a healthy, sustainable market offering opportunities for both investors and homebuyers.
Sources
- Global Property Guide - Latvia Price History
- LSM - Strong Growth in Latvian House Prices
- Latio Housing Market Report 2023
- Ober-Haus Latvia
- VIP Real Estate News
- CEIC Data - Latvia Property Price Index
- Latvia Sotheby's Realty Q1 2025 Overview
- Relive - Overview 2024 Trends 2025
- Latio Trend Predictions 2025
- Investropa - Latvia Real Estate Forecasts
- LSM - Property Market Expert Views
- Ministry of Finance - Inflation Report
- Dienas Bizness - Foreign Investment Analysis
- Njord Law - Latvia Investment Program
- EIB - Affordable Housing Collaboration
- ERR News - Baltic Housing Price Comparison
- Ober-Haus Lithuania Market Report 2025
- Baltic Real Estate Overview 2024-2025