All sources have been thoroughly verified for credibility. Furthermore, a local real estate expert has reviewed and approved the final article.
Yes, the analysis of Riga's property market is included in our pack
Considering buying a property in Riga? You're not alone!
Many people are enchanted by Riga's historical charm and dream of owning a stylish apartment or a cozy townhouse in this city.
Would it be a smart investment, though? Are property prices increasing in Riga? What is the price per sqm? Should you consider buying in the Old Town or Centrs? What are the taxes? What yields can I expect?
We have the answers.
The Investropa team has done their homework and know this market well. Actually, we have condensed all our findings in a pack. Get it now.
In this article, get ready to receive valuable insights from us.
How is the real estate market in Riga?
Is the property market doing well or poorly? Data will provide us with answers.
Types of properties
In Riga, you can find various types of properties for sale, including apartments, houses, townhouses, and land plots.
Apartments are typically located in multi-story buildings and range from cozy studios to spacious multi-bedroom units. Houses offer more space and privacy, often coming with a garden or yard. Townhouses are a mix between apartments and houses, sharing walls with neighboring units.
Land plots are vacant pieces of land where you can build your own property.
Each type of property offers different features and options to suit various preferences and needs.
Should you buy or rent?
(If you want to live there yourself and not rent it to others)
Whether you've already made Riga your home or are contemplating it for the future, you might be considering the buy vs. rent dilemma in this charming Latvian capital.
Without a doubt, it's better to buy if you want to invest in a stable asset and build equity over time.
One data can help you make a decision - the property price-to-rent ratio. It's like a measure of how much rental income you'll need to afford the property at its current value.
According to Numbeo, the property price-to-rent ratio in Riga is around 24.57, which is around the world average.
To put it simply, it usually takes an average of 25 years of rental payments to buy a property in Riga.
Housing prices in Riga
On average, according to the last data from Central Statistical Bureau of Latvia, purchasing a property in Riga would cost you around $2,590 per square meter.
Naturally, property prices are quite spread out. An apartment in Riga city center might have a different price per square meter than a suburban house in Mezaparks. We actually give you a more detailed breakdown in our pack for buying property in Riga and in Latvia.
To put things in perspective, it means that, instead of buying an apartment in a big city like Paris, you can afford 5 properties in Riga.
Also, housing prices in Riga are 41% cheaper than in Tallinn.
The most expensive neighbourhoods in Riga are probably Old Riga and Jugla, while the cheapest are likely Bolderaja and Imanta.
Trends
First and foremost, we have to acknowledge that Latvia remains, today, a very stable country. The last Fragile State Index that has been reported for this place is 42.8.
Keep this in view when pondering the viability of buying a property in in Riga.
If we look at the IMF’s forecasts, we can see that Latvia's economy is expected to soar by 11.6% in the coming 5 years, resulting in an average GDP growth rate of 2.3%.
If you want to invest in real estate in Riga it's a good thing because, when people experience an increase in wealth, it typically translates to a surge in housing costs.
Also, in Latvia, the average GDP per capita has changed by 8.9% over the last 5 years. It's a solid number.
This data is a positive signal - housing prices in Riga might soar in 2024 and after that.
Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Latvia right now.
Buying property in Riga
It is difficult to buy property in Riga due to the lack of reliable and updated information available. That's why we have created the pack to buy property in Riga and in Latvia.
Buying process
Inside our pack, we've outlined the complete buying process, including a detailed breakdown of prices and yields per area, tips for negotiating the price, and information about mortgage options.
Here, we're presenting you with a more straightforward version.
This is the step-by-step process to purchase a property in Riga:
- Research the Riga property market and set a budget in euros.
- Engage a reputable real estate agent familiar with Riga regulations.
- View properties and choose one that complies with Latvian building codes.
- Negotiate the price and terms in accordance with Latvian property laws.
- Sign a preliminary agreement and pay a deposit, usually 10% of the property price.
- Hire a notary to conduct due diligence and draft the Notarial Deed.
- Obtain a Latvian Personal Identification Code (PIC) for foreign buyers.
- Sign the final sales contract (Notarial Deed) in the presence of a notary.
- Pay the remaining balance through a Latvian bank account.
- Transfer property ownership at the Latvian Land Register and obtain a Land Register extract.
- Pay the 2% state fee for the transfer of property ownership.
- Receive the property keys and complete the purchase, ensuring all documents are accurately translated if necessary.
Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Latvia.
Make a profitable investment in Riga
Better information leads to better decisions. Save time and money. Download our guide.
Where to find a property
Check out these websites to find properties in Riga.
- Mercury Group Estate Latvia - They provide free real estate selection services for buying or renting properties in Latvia.
- Habita - They offer various types of properties, such as detached houses, apartments, and single-family houses, with different sizes and price ranges.
- ee24 - They offer 3099 properties for sale in Latvia, categorized by regions and property types.
- Property Guide Latvia - A personal adviser in the world of Latvian real estate, offering information on buying, selling, renting, and leasing properties in Latvia.
- Vestabalt - They offer a full range of real estate services, including property management, sale, rent, and lease of properties.
Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Latvia.
What you can get
As mentioned before, the average price per sqm in Riga is $2,590. A 1-bedroom property of 60 square meters would cost approximately $155,000, and a 2-bedroom of 85 square meters would cost approximately $220,000.
However, the amount you pay for a property can be different based on its characteristics and where it's found.
Housing prices in the top areas of Riga are usually at a premium. For about $300,000, you could get an apartment in Mezaparks, but a condominium in Jurmala might be priced at $280,000.
Of course, some areas are cheaper. You could locate a property in Jugla for $120,000 or a property in Imanta for just $100,000.
We give a more detailed pricing list in our full pack for buying property in Latvia.
Risks and pitfalls
Here are the main pitfalls when buying a property in Riga, Latvia:
- Land lease: Some properties have land lease agreements, which can lead to unexpected costs and limited ownership rights.
- Forest land restrictions: Certain properties may be classified as forest land, restricting development and usage.
- Historical building regulations: Buying heritage properties may involve strict preservation rules and costly renovations.
- Ethnicity restrictions: In some areas, there are restrictions on property ownership based on ethnicity.
- Soviet-era buildings: Older properties might lack modern amenities and require substantial upgrades.
- Seasonal changes: Consider property conditions in different seasons, like potential flooding in low-lying areas.
- Language barrier: Dealing with local contracts and legal matters may be challenging for non-Latvian speakers.
- Property scams: Be cautious of fraudulent sellers or unregistered agents, especially as a foreign buyer.
We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.
Everything you need to know is included in our Latvia Property Pack
Living in Riga
Life in Riga is vibrant and cosmopolitan, offering plenty of cultural and recreational opportunities for those looking to purchase property.
Cost of living
The cost of living in Riga is relatively low compared to other European cities. Prices for basic necessities such as food, transportation, and rent are much lower than in other major cities in Europe, making it an attractive destination for people looking for a budget-friendly lifestyle.
Here are some examples to better understand the cost of living in Riga:
- Rent for a one-bedroom apartment in the Old Town: $800/month.
- Monthly public transportation pass (e-talons): $30.
- "Grey peas with bacon" lunch for two at a local eatery: $15.
- "Valmiermuiža" beer at a bar: $4.
- Groceries at Rimi or Maxima supermarket: $100/week for a family of four.
- Basic utilities for an 85m² apartment with Latvenergo: $120/month.
- Ticket to a concert at Palladium Riga: $25.
- "Rigas Melnais balzams" liqueur at a liquor store: $10.
Neighbourhoods and spots
Since we strive to present information clearly and in a reader-friendly manner, we've created a summary table outlining the different neighborhoods in Riga. For yields, prices and rents, check our property pack.
| Neighborhood | Description | Strengths | Weaknesses |
|---|---|---|---|
Old Town | Old Town is the historic center of Riga with charming cobblestone streets and well-preserved medieval architecture. | Rich cultural heritage, popular tourist destination, vibrant nightlife. | High tourist crowds, limited parking options, higher cost of living. |
Centrs | Centrs is a central neighborhood offering a mix of modern and Art Nouveau architecture, along with numerous shops and restaurants. | Central location, diverse dining and entertainment options, good public transport. | Noisy due to traffic, limited green spaces, higher real estate prices. |
Maskavas Forštate | Maskavas Forštate is a historic area known for its multicultural atmosphere and traditional markets. | Rich cultural diversity, affordable housing options, proximity to the city center. | Safety concerns in some parts, occasional traffic congestion, limited recreational facilities. |
Agenskalns | Agenskalns is a residential neighborhood with a mix of wooden houses and modern buildings, providing a calm and family-friendly environment. | Peaceful atmosphere, well-connected by public transport, proximity to parks and the Daugava river. | Limited shopping options, fewer entertainment venues, potential traffic during rush hours. |
Purvciems | Purvciems is a large residential area with a mix of Soviet-era apartment blocks and newer developments. | Affordable housing, various shopping centers, good public transportation. | Less vibrant atmosphere, limited green spaces, longer commute to the city center. |
Ziepniekkalns | Ziepniekkalns is a quiet residential neighborhood with a suburban feel and a mix of private houses and apartments. | Quiet environment, family-friendly, proximity to parks and nature. | Limited entertainment options, fewer restaurants, longer commute to the city center. |
Teika | Teika is a residential area known for its green spaces and a combination of private houses and Soviet-era apartment buildings. | Green and peaceful environment, good local amenities, well-connected by public transport. | Limited nightlife, fewer cultural attractions, some older buildings may need renovation. |
Ķengarags | Ķengarags is a diverse neighborhood with a mix of residential areas and industrial zones, known for its multicultural community. | Cultural diversity, affordable housing, good public transport. | Industrial areas may create pollution, occasional safety concerns, limited recreational facilities. |
Pleskodāle | Pleskodāle is an up-and-coming neighborhood with a mix of residential and industrial areas, attracting young professionals and creatives. | Emerging creative scene, relatively affordable housing, proximity to city center. | Some areas still undergoing development, potential noise from industries, limited established amenities. |
Bolderāja | Bolderāja is a historic district with a coastal location and a mix of wooden houses and Soviet-era buildings. | Coastal charm, affordable housing, historical significance. | Some areas in need of renovation, limited public transport options, distance from the city center. |
Life in Riga
Riga's economy is largely driven by its tourism and service industries. It is a major financial center in the Baltic region, and its port is one of the largest in the Baltic Sea.
According to the IMF's data, the GDP of Riga contributes to almost 50% of Latvia's GDP. It's nice because people in cities with strong economies usually get better services, which makes life better.
What expats usually like the most in Riga is its vibrant nightlife and the variety of cultural activities to explore, such as the Riga Opera House, the Latvian National Museum of Art, and the Freedom Monument.
Regarding safety, the crime rate of Riga is around 38, which is average. Riga has a strong police presence and a low poverty rate, making it a relatively safe city with low crime rates.
A good point for a property investor - Riga has a mass rapid transit system called the Riga Metro, which consists of several lines and more than 20 stations.
Access to healthcare in Riga is very good, with a Healthcare Index of 61. Good healthcare facilities is a positive indicator in a real estate market.
Don't lose money on your property in Riga
100% of people who have lost money in Latvia have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
Renting out in Riga
For those aiming to buy property solely for renting out and earning income.
Long-term
Tenant Profiles in Riga
According to the data reported by Wikipedia, the home ownership rate in Latvia is 83%, which is rather high.
It is probably a bit less in Riga though.
If you decide to buy and rent out to long-term tenants, you should target young professionals, students, and expats looking for a convenient and affordable place to stay in the city. Additionally, Riga also offers great potential for short-term rental opportunities such as holidaymakers and business travellers.
Here is a little summary table we've made for you.
| Property type and area | Profiles of potential tenants | What they are looking for | Expected monthly rent in $ |
|---|---|---|---|
Apartment in City Center | Professionals, expats | Central living, convenience | $500 - $1,000 |
Flat in Ķīpsala | Families, upper-middle class | Prestigious area, river views | $800 - $1,500 |
Studio in Art Nouveau District | Students, young professionals | Cultural scene, trendy atmosphere | $400 - $800 |
Condo in Purvciems | Families, working-class | Suburban living, affordability | $300 - $600 |
2-Bedroom Apartment in Mežaparks | Families, nature lovers | Green surroundings, park access | $600 - $1,200 |
High-rise Apartment in Pardaugava | Young professionals, urban dwellers | Modern amenities, city view | $500 - $1,000 |
1-Bedroom Apartment in Agenskalns | Singles, young couples | Local vibe, affordable options | $300 - $600 |
Rental yields
Nowadays, rental yields in Riga are usually below 5%. It's not much. As you might know it already, a good rental yield generally falls within the range of 7% or more.
Rental yields in Riga are highest in the city centre, where properties close to public transport, amenities and tourist attractions are in high demand. This demand keeps rental prices high, allowing landlords to maximize their return on investment.
For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.
Finally, be aware that rental incomes in Riga are taxed at 10%, which is very advantageous.
Short-term
You could also decide to rent short-term to business travelers, tourists, and students studying in Riga. Additionally, digital nomads and remote workers looking for an extended stay could also be potential tenants.
If you decide to go with that option, look for properties in the Old Town and the Central District of Riga, as these areas are popular amongst short-term tenants. Additionally, the Art Nouveau District is a great area to consider, as it is a popular tourist destination.
Currently, there are approximately 2,515 active Airbnb listings in Riga, reflecting a highly dynamic and bustling short-term rental market. The average daily rate stands around $60.
You have the opportunity to generate a nice additional income stream then. Based on feedback from online testimonials and data analytics platforms such as AirDNA, Guesty, and Inside Airbnb, people who offer short-term rentals in Riga can make around $900 per month. Also, the average occupancy rate is estimated at 68%.
Is it worth buying real estate in Riga then?
Buying a property in Riga can be a fantastic idea for savvy investors and those seeking a budget-friendly lifestyle. Riga's property market shows promise with a stable economy and the potential for future price increases.
The city's affordability compared to other European capitals is a significant advantage, allowing individuals to own property without breaking the bank. Rental income opportunities in Riga are also appealing, with the potential to target various tenant profiles.
While rental yields may not be exceptionally high, the city's low 10% tax rate on rental income makes it an enticing prospect for landlords. Moreover, Riga offers a vibrant and culturally rich environment, a low cost of living, and decent safety levels, enhancing its appeal for residents.
However, there are situations where buying property in Riga might not be the best move. If you're unsure about your long-term plans or intend to stay in Riga temporarily, renting could be a more practical option, as the property price-to-rent ratio suggests it might take a considerable time to recoup your investment through rental income.
Additionally, potential buyers should be cautious about the potential pitfalls in the property market, such as land lease agreements, development restrictions, heritage property regulations, and ethnic-based ownership restrictions. Navigating these complexities can be daunting, especially for foreign buyers or non-Latvian speakers, leading to unexpected costs and legal complications.
In summary, Riga offers exciting prospects for property investors and those seeking an affordable lifestyle, but it may not be the right choice for short-term residents or those unwilling to navigate potential challenges in the market. Careful consideration of individual circumstances and objectives is crucial before deciding to buy property in Riga.
Make sure you understand the real estate market in Riga
Don't rush into buying the wrong property in Latvia. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.
The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.