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Saturday 23.06.2018 | Name days: Līga
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Expert: only 1 200 freely available apartments in new project buildings

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Baltic news, News from Latvia, BNN-NEWS.COM, BNN-NEWS.RU, Andris Božē

Andris Božē

There are not much quality apartments with low costs and rational planning, thus the supply might run out soon, says Andris Božē, YIT Celtniecība Board Chairman.

Buyers of residential building block apartments should be ready the housing will have to be renovated soon, while those willing to purchase new project apartments should consider housing management and utility costs, thus the current choice is limited. Moreover, it is even more narrowed down by the apartments unavailable on the market due to their financial liabilities, the expert says.

The market needs a certain period of time to recover. If comparing the situation in Latvia with the one in Finland in the 1990s, when the market upraise was followed by a drop, it is likely it will be the same scenario also here, Boze says.

Banks have seized a lot of new apartments, about 3 000, so there are only 1 200 freely available apartments. Whereas the ones owned by banks might enter the market in 2013, but not all of them.

Moreover, new project are barely entering the market, because there is little construction, thus the supply is consonantly shrinking. Around 300-400 new project apartments are built in Latvia in a quarter’s time and part of them are built within the framework of the social assisted house development, financed by Riga City Council. Similarly, some of the buildings are among the so called «dead projects», while some will be adjusted to the current market needs. The new housing sector grows 8-10% yearly, the expert explains.

Boze also adds a part of the new unfinished projects will never ever be rounded up and most likely people will never inhabit them, because they are either located in places with poor infrastructure or the space of them is too big for the current demand.

Also, some of them cannot be classified as quality supply, as their planning is not rational and well-thought over. Or there are also situations when only 20 apartments are bought in a 50-apartment building. Consequently, people cannot pay for the services and the lift or heating is switched off. Then owners of apartments in such buildings are like captives, he states.

People are also very much interested in purchasing housing in Riga Silent Center and Jurmala. Basically, the interest stems from the CIS countries. However, also this supply can run out soon enough, Boze says.

 


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