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Sunday 22.07.2018 | Name days: Marija, Marika, Marina
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Experts: Latvia’s real estate sector could potentially «die»

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThe nihilistic attitude of Latvian legislators toward amendments to multiple laws and their devastating impact on Latvia’s real estate sector means death to this particular sector of the country’s economy, according to the largest real estate project developers in Latvia.

The purchasing power of Latvian residents has been negatively impacted by legislators’ approved principle of ‘laid-down keys’. The interest of foreign investors in the possibility of buying real estate properties in Latvia has been impacted by amendments to the Law on Immigration. «Latvian residents had bought a mere 190 apartments out of a total of 475 new projects sold in 2014. It is not even half. This only serves to demonstrate relations between the current environment of Latvia’s real estate market and residents’ purchasing power. The sector will likely suffer tremendous losses following the recently adopted and planned amendments, because all of this will result in lower activity of foreign investors and the domestic market,» – says Chairman of YIT Celtniecība Andris Bože.

Developers of real estate projects note that amendments to the Insolvency Law that are planned to come into force March 1stm will likely discourage many Latvian residents from purchasing a home through the use of mortgage loan services. «By carrying out these amendments, which were originally intended to make real estate purchases easier for Latvian residents, legislators have actually shot themselves in the foot. The majority of mortgage loan issuers have increased the size of the first instalment to up to 40% of the price of real estate properties. As a result of this, people who planned to purchase housing have been forced to reconsider. In addition, because of this decision, many leading banks in Latvia have decided to exit the state programme for support of young families,» – comments Bože.

In regard to the established situation, experts of the industry recommend legislators to review their decisions and the possible backlash of amendments to the Law on Immigration on Latvia’s national economy and residents’ welfare in general.

«If the country does not make reasonable and logical decisions soon, Latvia will enter tough times again, and residents will likely be forced to emigrate, because the current situation – lack of clarity with residence permits and the planned amendments to the Law on Insolvency – are unreasonably unfriendly not only for entrepreneurs, but also residents, who work and want to form a family in Latvia,» – concludes Chairman of Domus Ralfs Jansons.

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