Authored by the expert who managed and guided the team behind the Latvia Property Pack
Yes, the analysis of Riga's property market is included in our pack
What is happening in Riga’s real estate market? Are prices going up or down? Is the city still a hotspot for foreign investors? How are local government policies impacting real estate and taxes in 2025?
These are the questions everyone is asking us every day—professionals, buyers, and sellers alike, from the Old Town to the modern districts and beyond. Perhaps you’re wondering the same thing.
We know this because we stay deeply connected with local professionals and people like you, diving into the Riga real estate market every single day. That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market trends and dynamics.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
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1) Stricter short-term rental rules in Riga will impact the real estate market and investor strategies
Riga's real estate market is undergoing changes due to new regulations on short-term rentals.
In 2023 and 2024, Latvia's Ministry of Economics introduced a short-term rental accommodation register to curb illegal tourism services and promote fair competition. This move is reshaping the market landscape, making it more regulated and predictable for investors.
By September 2024, the number of short-term rental listings on platforms like Airbnb in Riga dropped to 2,362. With a median occupancy rate of 64% and an average daily rate of $56, the market shows signs of stabilization but also hints at a potential decline, largely due to these new regulations.
Media reports have highlighted the challenges faced by short-term rental owners, who now deal with time-consuming and costly compliance processes. This has led many to reconsider their investment strategies.
Real estate agencies have noticed a shift from short-term to long-term rentals, driven by regulatory changes and market uncertainty. As more properties transition to long-term rentals, rental prices are expected to rise due to increased demand.
Investors are pivoting towards more stable and less regulated opportunities, reflecting a strategic adaptation to the evolving market conditions in Riga.
Sources: Ministry of Economics Latvia, Airbtics
2) Riga’s property prices will stabilize after rapid growth, creating more opportunities for buyers
Riga's property prices are showing signs of stabilization after a period of rapid growth.
In June 2023, apartment prices in Riga dropped by 8.42% compared to the previous year, and by July 2024, they further declined by 3.96% to €848 per square meter. This indicates that the once rapid growth is now slowing down. More new residential developments, like the Lucavsala project with its 590 new apartments, are entering the market, giving buyers more choices and helping to stabilize prices.
Government initiatives are also contributing to this trend. Programs like property tax incentives and the Workcation Riga initiative are designed to support real estate development and maintain market stability. Rising interest rates have made mortgages less affordable, leading to a decline in mortgage loans used in transactions. This has resulted in more cautious spending among buyers, further cooling the market.
Historically, Riga's property prices have gone through cycles of rapid growth followed by stabilization. The current decline in prices aligns with these patterns, suggesting a move towards stabilization. Demographic trends, such as a stable or declining population growth rate, are reducing pressure on the housing market. This, along with increased rental property availability, points to a more balanced market.
Sources: Global Property Guide, Estate Latvia, Live Riga
We have made this infographic to give you a quick and clear snapshot of the property market in Latvia. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
3) Rental yields in new developments will increase as these areas attract long-term tenants
Rental yields in newly developed areas are on the rise as these spots become hot picks for long-term tenants.
In Riga, there's a buzz around rental properties, especially in new developments. Rental prices are climbing, and the city is boasting a solid yield of 8.47% in 2024. This makes it a prime location for investors looking for good returns.
Take the Lucavsala project, for instance. It's adding a bunch of new apartments to the market, which not only boosts housing supply but also pushes up property values. More people are moving to cities like Riga for better jobs, which means the demand for housing and modern amenities is on the up.
Riga is also stepping up its game with infrastructure and amenities. Projects like Rail Baltica are set to improve transport links, making these areas even more attractive. Plus, government programs like "Rental Housing for Latvian Professionals" are encouraging development, which can drive up rental yields.
New developments are seeing high occupancy rates, like the Verde office complex, which shows there's strong demand. This trend supports the potential for rising rental yields in these areas.
With all these factors in play, newly developed areas in Riga are becoming more desirable for long-term tenants, promising good returns for investors.
Sources: VARAM, Invest in Latvia, Colliers
4) Suburban rents will stay stable as city living becomes more popular, lowering demand in these areas
More people are choosing to live in cities, and Riga is a prime example.
In Riga, the metro area population dipped slightly from 621,000 in 2023 to 619,000 in 2024. This small decline hints that fewer people are opting for suburban life, which could mean stable rents in those areas. The trend is part of a larger urbanization movement in Latvia, where 68.67% of the population now lives in cities.
Riga's city life is becoming more appealing thanks to big investments in urban infrastructure. The city has allocated a significant budget for education and transport improvements, making urban living more attractive. These enhancements are drawing people away from the suburbs, boosting the allure of city life.
The real estate market in Riga is also feeling the shift. There's been a 19.2% increase in turnover for premium apartments in 2023, showing a growing interest in city properties. This surge in demand for urban living naturally reduces the need for suburban rentals, helping to keep those rents stable.
Remote work is another factor. It allows people to enjoy city amenities while commuting to the suburbs when needed. This flexibility means less pressure on suburban housing, contributing to stable rents in those areas.
Sources: World Population Review, Riga.lv, Macrotrends
5) Riga’s rising student numbers will increase demand for affordable rentals near universities
Riga is experiencing a surge in international student enrollment at its universities, including Rīga Stradiņš University and Riga Technical University.
These students, coming from all over the world, often look for places to live close to their campuses. But here's the catch: Riga is facing a shortage of affordable housing. Reports from the Latvian Students Union and local media highlight that student dorms are packed, and rental prices are steep, making it tough for students to find a place that fits their budget.
Even though there was a slight dip in rental prices in 2023, the demand for rentals near universities is still high. This is largely because of the steady influx of international students choosing Riga for their studies. Real estate experts believe this trend will continue, keeping the demand strong.
For those considering investing in property, this growing student population presents an opportunity. With more students arriving each year, the need for affordable rental properties near universities is likely to increase. This could mean a steady stream of potential tenants for property owners.
Insider tip: Areas around Rīga Stradiņš University and Riga Technical University are particularly popular. If you're looking to invest, these neighborhoods might be worth a closer look. The proximity to campus is a big draw for students, making these areas prime spots for rental properties.
As Riga continues to attract students from around the globe, the city's real estate market is poised for growth. For potential property buyers, this could be a chance to tap into a thriving rental market driven by the city's vibrant student community.
Sources: RSU News, LSM.lv, RTU News
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6) Riga's residential market will see more foreign investors as Latvia's economy strengthens
Foreign investors are increasingly eyeing Latvia's residential real estate market as the country's economy strengthens.
Latvia is bouncing back from the pandemic, and with projected GDP growth for 2024-2025, confidence in the real estate market is on the rise. This economic upswing is a magnet for foreign investors who are always on the lookout for stable and growing economies.
Thanks to its strong economic performance, Latvia has seen improved credit ratings, making it a more appealing spot for foreign investors. Better credit ratings mean lower risks, which naturally leads to more investment activity.
Riga, the capital, is buzzing with urbanization and development projects that are boosting infrastructure and expanding residential areas. This not only raises property values but also draws in both local and international investors, as everyone wants a piece of the action when infrastructure improves.
With these developments, property values are expected to climb, making it an attractive proposition for those looking to invest in real estate. The combination of economic growth and urban development is a recipe for increased demand.
As Latvia continues to strengthen its economy, the number of foreign investors in Riga's residential market is set to grow. The ongoing improvements and economic stability are key factors driving this trend.
Sources: Gold Visa Latvia, Euronews, 137.lv
7) Riga's real estate market will draw more international interest as it becomes known as a cultural and business hub
Riga is becoming a hotspot for international real estate investors as it gains fame as a cultural and business center.
In 2023, foreign investors poured a significant amount of money into Latvia, showing they see potential in Riga's market. This influx of capital is a clear sign that Riga is on the radar of global investors, eager to tap into its growing opportunities.
Tourism in Riga is booming, with 1.2 million visitors in 2023, a 22% jump in hotel stays from the previous year. Travelers from Finland, Sweden, and Poland are flocking to the city, drawn by its vibrant cultural scene and events like the famous Christmas Fair, which has caught the eye of international media.
Riga is also investing heavily in its infrastructure, with a EUR 100-million plan to modernize its transport network by 2026. This upgrade will make the city more accessible and appealing to both tourists and businesses, enhancing its reputation as a dynamic place to live and work.
The Riga Investment and Tourism Agency is actively promoting the city in Scandinavian and Polish markets, showing a strong commitment to making Riga a business-friendly destination. This effort is part of a broader strategy to boost Riga's international profile and attract more foreign interest.
With these developments, Riga is positioning itself as a key player in the international real estate market, offering a unique blend of cultural richness and business potential.
8) Foreign buyers from neighboring countries will increasingly seek second homes or investment properties in Riga
Riga is catching the eye of foreign buyers from nearby countries looking for second homes or investment properties.
With property prices climbing in places like Estonia and Lithuania, Riga's real estate market stands out as more affordable. This affordability is a big draw for those on the hunt for investment opportunities or a cozy second home.
Another perk is the favorable exchange rates, making it easier for neighbors to buy in Riga. When their currencies are strong against the Euro, investing in Riga's real estate becomes a smart financial move. Riga's real estate agencies are also stepping up their game, actively wooing foreign buyers with targeted campaigns and promotions.
Getting to Riga is a breeze now, thanks to improved transportation links with neighboring countries. This better connectivity means potential buyers can easily pop over to check out properties. Plus, the Latvian government sweetens the deal with incentives and tax perks for foreign investors, making Riga even more tempting.
Source: Global Property Guide
We made this infographic to show you how property prices in Latvia compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
9) Rents in new neighborhoods will rise as they gain popularity with families and young professionals
Rents in newly developed neighborhoods are on the rise as these areas attract more families and young professionals.
In 2023, Riga's premium apartment market saw a 19.2% jump in turnover, showing a clear demand for housing in these fresh locales. This surge is a sign that people are eager to move into these vibrant new communities.
Property values in these areas are climbing too, with new constructions in Riga experiencing a 12-15% price hike in 2023. As property values go up, so do rental prices, making it a hot market for investors and renters alike.
Latvia's urbanization trend is strong, with 68.67% of the population living in cities in 2023. This urban shift is pushing more people to seek homes in bustling areas like Riga, further boosting demand.
New residential projects, like Lucavsala with its 590 new apartments, are popping up, bringing better amenities and infrastructure. These improvements make the neighborhoods even more appealing to families and young professionals.
Transport projects such as Rail Baltica are enhancing connectivity, making it easier to commute to the city center. This increased accessibility is a big draw for those looking to live in newly developed areas.
Sources: Estate Latvia, Walterboro Live, Global Property Guide
10) Teika will attract young professionals for its affordable and accessible living options
Teika is becoming a hotspot for young professionals because it's affordable and well-connected.
In the heart of Riga, renting a one-bedroom apartment can set you back between €400-700 monthly, but in Teika, it's a more wallet-friendly €300-450 per month. This price difference is a big draw for those starting their careers.
Getting around is a breeze, thanks to improved public transportation that links Teika to key business districts. This ease of commuting is a major plus for young professionals who value their time and convenience.
Teika is also home to vibrant coworking spaces like Teikums Coworking Space, which offer flexible work environments and networking opportunities. These spaces are perfect for startups and freelancers looking to connect and collaborate.
Young professionals often seek neighborhoods that blend urban life with a touch of nature. Teika delivers with its green spaces and family-friendly markets, making it a pleasant place to live and work.
Living in Teika is not just about cheaper rent; the overall cost of living is lower too. A single person's monthly expenses, excluding rent, are around €855.4, which is more manageable than in many central areas.
Sources: Urban Treetops, XYZ Lab, Numbeo
11) Suburban rental yields will dip slightly with more properties available, boosting competition among landlords
In Riga, suburban rental properties are on the rise, offering more choices for renters.
Back in June 2023, the number of apartments for sale in Riga's largest housing estates increased by 30% compared to the previous year. Many of these are turning into rentals, which means more competition for landlords as they try to attract tenants.
New developments like the Lucavsala project are adding to this trend. With 590 new apartments entering the market, renters have even more options. This influx of properties means landlords might have to lower prices, leading to a slight decline in rental yields.
People are moving from central districts to the suburbs, but the overall population growth in these areas isn't as strong as before. In fact, projections show that the Pierīga region, which includes Riga, could see a population drop of 18% by 2051. This shift might further affect rental demand in the suburbs.
With more properties available, suburban rental yields are expected to decline slightly. This is because landlords will face increased competition, pushing them to offer more attractive deals to potential tenants.
Sources: OSW Commentary, LSM.lv, Global Property Guide
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12) Suburban areas near Riga will see a price increase as more people look for larger homes outside the city center
In 2023, more Latvians started working from home, changing how they choose their living spaces.
Suburban areas around Riga, like Purvciems, are seeing a boom, with real estate listings up by 30%. This surge is partly due to better public transport and new roads, making it easier to commute to the city. Families love the quieter lifestyle and extra space these areas offer.
Meanwhile, apartment prices in Riga's city center dropped by 8.42% in mid-2023, pushing people to explore more affordable options outside the city. New housing projects, such as the Lucavsala project, have added 590 new apartments, sparking interest in suburban living.
Suburban living is not just about space; it's about lifestyle. People are drawn to the idea of having a garden, more room for kids to play, and a sense of community. The shift is also fueled by the desire for a better work-life balance, which is easier to achieve outside the bustling city center.
As more people move to the suburbs, local businesses are thriving. New cafes, shops, and services are popping up, making these areas even more attractive. This growth is creating a vibrant community atmosphere that appeals to both young professionals and families.
With these changes, suburban areas around Riga are set to experience a price boost as demand continues to rise. The combination of affordable housing, improved infrastructure, and a desirable lifestyle makes these areas a hot spot for potential buyers.
Source: OSW Commentary
13) Riga's residential market will shift towards community-focused living environments due to growing interest
Riga's residential market is shifting towards community-focused living environments.
People are increasingly drawn to co-living spaces, and Eika Asset Management has invested over 20 million euros in developing high-quality apartments and modern co-living spaces in the city. This significant investment underscores the growing interest in unique living environments that foster a sense of community.
Mixed-use residential projects are popping up, further supporting this trend. Take the new project by Gensler in Riga, for example. It combines office, retail, and residential spaces, aiming to create a vibrant community atmosphere. These projects often feature amenities like green spaces and community centers, which homebuyers increasingly prefer for a sense of belonging.
Another example is the Lucavsala project, which is adding 590 new apartments. This development, along with others like "Tērbatas dārzs," contributes to the expanding supply of community-oriented properties. It's part of a broader trend in new residential construction aimed at enhancing community living.
These projects are not just about buildings; they're about creating spaces where people can connect. The focus is on fostering a sense of community, which is becoming a key factor for many when choosing a home. Developers are responding to this demand by integrating community-focused features into their projects.
As more people seek out these community-focused living environments, Riga's residential market is likely to continue evolving in this direction. The emphasis on community and belonging is reshaping how residential spaces are designed and developed.
Sources: Eika Asset Management, Gensler
14) Riga’s rental yields will rise slightly as more expatriates seek housing
Riga's rental market is on the rise, thanks to a growing expatriate community looking for homes.
With international companies like Roche setting up shop in Riga, there's a surge in demand for skilled professionals. This influx of talent is boosting the need for rental properties, making it a hot market for investors.
The Riga Investment and Tourism Agency is also making waves with initiatives like the "Work in Riga" platform, which aims to attract foreign nationals and support investors. As a result, neighborhoods such as Agenskalns and Vecriga are becoming popular, with strong rental demand and higher yields.
Riga is also seeing a potential influx of 1 billion euros in foreign investment, which is creating thousands of new jobs. This economic boom is drawing more expatriates, who often prefer renting over buying, further driving up rental yields.
In areas favored by expatriates, rental prices are on the rise, reflecting the increasing demand for housing. This trend is particularly noticeable in neighborhoods that are popular among the international community.
Sources: Riga.lv, Live Riga, Regus
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Latvia. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
15) Riga's growing diversity will boost demand for diverse housing options
Riga is becoming a melting pot of cultures, with its population growing more diverse every year.
One big reason for this change is the rise in immigration. In 2022, over half of Latvia's newcomers chose Riga as their new home. This trend is not slowing down, as more people are getting residence permits, especially in urban areas like Riga. The city has seen its foreign population grow from 30,000 in 2012 to nearly 70,000 in 2022.
International students are also adding to the city's diversity. Rīga Stradiņš University (RSU) is a hotspot, with over 2,900 students from 77 countries currently enrolled. In 2023, the university welcomed 508 new students from 39 different countries, drawn to popular programs like Medicine and Dentistry.
Government policies are making a difference too. Riga has been a safe haven for Ukrainians fleeing conflict, with over 20,400 Ukrainians registered in the city by January 2023. This support has helped create a welcoming and multicultural environment.
The real estate market is feeling the impact of this diversity. Rental prices in Riga have gone up by about 5% from the previous year, driven by high demand for housing in urban areas. Young professionals are particularly interested in areas near transport links and universities, attracted by the vibrant lifestyle.
With these changes, Riga is becoming a city where diverse housing options are in demand, reflecting its growing multicultural population.
Sources: Council of Europe, Rīga Stradiņš University
16) Central Riga will see higher rental yields as demand for short-term rentals from tourists and business travelers rises
Rental yields in central Riga are on the rise as more tourists and business travelers flock to the city.
Riga is becoming a hot spot for visitors, and this surge in tourism is pushing up the demand for places to stay. More international visitors are discovering Riga, and this trend is expected to keep growing, making it a prime time for property investors.
Short-term rentals are seeing high occupancy rates, with a median occupancy rate of 64% between 2023 and 2024. Travelers are increasingly choosing these rentals over traditional hotels, and Airbnb listings in Riga are frequently booked, showing just how popular they are.
Business events like RIGA COMM 2024 are drawing in crowds, further boosting the need for short-term rentals. New direct flight routes, such as the one from Riga to Rzeszów, Poland, are making it easier for both tourists and business travelers to visit, adding to the demand.
With more people coming in for conferences and events, the city is buzzing with activity. This influx of visitors is a golden opportunity for property owners, as the demand for short-term rentals continues to climb.
Investors looking at Riga can expect a promising future, as the city becomes more accessible and attractive to a global audience. Rental yields are set to benefit from this growing interest, making it a smart move for those considering property investments.
Sources: Global Property Guide, Airbtics, Ergonode
17) Foreign buyers will target Riga’s luxury market more due to favorable exchange rates and investment opportunities
Foreign buyers are increasingly drawn to Riga's luxury real estate market due to several compelling factors.
One major reason is the favorable exchange rates, which have made investments more appealing for buyers from places like the UAE. This is clearly seen in the massive €3 billion investment in the Riga Waterfront project, a development that underscores how currency values can sway investment choices.
Riga is buzzing with new luxury property developments, including the ambitious Riga Waterfront project, which plans to offer 8,000 luxury homes and a 1,000-room hotel. This project aims to establish Riga as a new European hub, turning it into a prime spot for luxury real estate. The Latvian government sweetens the deal with incentives like tax breaks and the Golden Visa program, which grants residence permits to real estate investors.
Compared to other European capitals, Latvia's property prices are relatively low, making it an attractive option for foreign investors. The country's stable economic growth and welcoming investment climate further enhance Riga's real estate appeal. International real estate agencies are actively promoting Riga as a top investment destination, fueling the surge in foreign interest.
Insider knowledge suggests that the Latvian government's proactive approach in attracting foreign capital is paying off. By offering residence permits and tax incentives, they are creating a favorable environment for international buyers looking to invest in luxury properties.
With Riga's strategic location and ongoing developments, it's no wonder that foreign investors are eyeing the city as a lucrative opportunity. The combination of affordable luxury properties and government incentives makes Riga a standout choice for those looking to invest in European real estate.
Sources: Global Citizen Solutions, AGBI, NJORD Law, Live Riga, Statista
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.