Real Estate Market Overview for 2024
and Forecasts for 2025
Real Estate Market Overview for 2024 and Forecasts for 2025
The year 2024 in Latvia’s real estate market has been one of significant changes and adaptation. In this article, we will review the key trends and outline expectations for 2025.
2024: Market Recovery and Changing Buyer Habits
In 2024, the decrease in Euribor rates in the second half of the year positively impacted real estate market activity. According to experts, the highest demand was for fully completed homes.
Family Priorities
Three-room apartments were the most sought-after among families looking for more spacious and long-term housing solutions. Smaller apartments, such as two-room units, attracted young professionals and pre-retirement individuals, while one-room apartments remained popular for both purchase and rental.
Energy Efficiency as a Priority
Buyers increasingly preferred homes with high energy efficiency. This trend was driven by economic considerations and bank offers that included more favorable interest rates for properties with energy-efficient solutions.
As reported by NRA, "one-room and two-room apartments, especially in renovated buildings, remained the most popular due to lower maintenance costs." Additionally, according to Cenu Banka, December 2024 saw a record-high number of registered property purchases in the Land Registry.
2025: Cautious Growth and Changing Forecasts
Moving into 2025, experts predict cautious market growth. With Euribor interest rates expected to drop to around 1.95% by the end of the year, buyers may gain more confidence and become more active in the market.
The year 2024 in Latvia’s real estate market has been one of significant changes and adaptation. In this article, we will review the key trends and outline expectations for 2025.
2024: Market Recovery and Changing Buyer Habits
In 2024, the decrease in Euribor rates in the second half of the year positively impacted real estate market activity. According to experts, the highest demand was for fully completed homes.
Family Priorities
Three-room apartments were the most sought-after among families looking for more spacious and long-term housing solutions. Smaller apartments, such as two-room units, attracted young professionals and pre-retirement individuals, while one-room apartments remained popular for both purchase and rental.
Energy Efficiency as a Priority
Buyers increasingly preferred homes with high energy efficiency. This trend was driven by economic considerations and bank offers that included more favorable interest rates for properties with energy-efficient solutions.
As reported by NRA, "one-room and two-room apartments, especially in renovated buildings, remained the most popular due to lower maintenance costs." Additionally, according to Cenu Banka, December 2024 saw a record-high number of registered property purchases in the Land Registry.
2025: Cautious Growth and Changing Forecasts
Moving into 2025, experts predict cautious market growth. With Euribor interest rates expected to drop to around 1.95% by the end of the year, buyers may gain more confidence and become more active in the market.
Macroeconomic Impact
According to Swedbank's chief economist, Līva Zorgenfreija, "high interest rates and cautious economic growth continue to impact housing affordability and buyer sentiment." However, stable employment and wage growth in certain sectors create hope for increased market activity.
Sustainable Thinking
The demand for energy-efficient homes will continue to grow. As noted by ABC.lv, "buyers increasingly value properties with lower operating costs and those that align with green thinking."
Regional Aspect
In 2025, an increase in demand in regional areas is expected, as more people choose to live outside Riga, where housing is more affordable and the environment is quieter.
Uncertain Factors
Although the forecasts are positive, the real estate market will also be influenced by external factors, such as global economic changes and geopolitical events. As Edgars Surgofts, head of Bigbank’s Latvian branch, states: "The Baltic states, as small open economies, are highly dependent on external factors, and unpredictable events may also impact the housing market."
Conclusions
The real estate market in 2024 showed the first signs of recovery, driven by falling interest rates and increasing demand for energy-efficient housing. However, 2025 promises cautious growth, influenced by both the local economy and external circumstances.
To make well-informed decisions, buyers and investors must closely monitor market changes and assess both prices and property quality.
References:
According to Swedbank's chief economist, Līva Zorgenfreija, "high interest rates and cautious economic growth continue to impact housing affordability and buyer sentiment." However, stable employment and wage growth in certain sectors create hope for increased market activity.
Sustainable Thinking
The demand for energy-efficient homes will continue to grow. As noted by ABC.lv, "buyers increasingly value properties with lower operating costs and those that align with green thinking."
Regional Aspect
In 2025, an increase in demand in regional areas is expected, as more people choose to live outside Riga, where housing is more affordable and the environment is quieter.
Uncertain Factors
Although the forecasts are positive, the real estate market will also be influenced by external factors, such as global economic changes and geopolitical events. As Edgars Surgofts, head of Bigbank’s Latvian branch, states: "The Baltic states, as small open economies, are highly dependent on external factors, and unpredictable events may also impact the housing market."
Conclusions
The real estate market in 2024 showed the first signs of recovery, driven by falling interest rates and increasing demand for energy-efficient housing. However, 2025 promises cautious growth, influenced by both the local economy and external circumstances.
To make well-informed decisions, buyers and investors must closely monitor market changes and assess both prices and property quality.
References:
- "2024 Housing Market Trends: Which Apartments Were the Most in Demand in Latvia?" – NRA
- "Housing Discussions: Economic Forecasts for 2025" – Swedbank Blog Post
- "Experts: Cautious Growth Expected in the Housing Market in 2025" – ABC.lv
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