According to Ober-Haus, flat prices in Tallinn and Riga rose in the 4th quarter of 2009 along with increasing transaction volumes, indicating the market has passed the bottom of the cycle.

Riga, Latvia

Prices in Soviet-era suburbs – where the large majority of housing transactions take place - rose 4 percent in Q4 compared to the previous quarter. While average prices in these 1960’s and 1970’s era residential districts fell 61 percent in the last 2 ½ years, to a low of €460 per sqm, they have risen somewhat in recent months to €494 per sqm on the back of increased sales volumes.

Prices remained flat in Riga city centre in Q4, with average prices of €1,500 per sqm in the old town and prime city centre, falling off to €800 per sqm in peripheral areas of the centre.

Riga still has the cheapest real estate of any European Union capital city.

Tallinn, Estonia

Residential prices rose 7 percent in Q4 compared to Q3, marking a significant reversal of the last 2 ½ years’ declines. While average prices fell as much as 58 percent from April 2007 through July 2009, to an average of €669 per sqm, they have since bounced back to €753 per sqm on average in Tallinn. Transaction volumes have also risen 25 percent compared to the previous quarter, indicating the bottom of the market has passed.

Vilnius, Lithuania

Vilnius, which started its price decline six months later than Tallinn and Riga, still showed prices declines of 4 percent in Q4, indicating Lithuania may recover later than the others as well. The 4 percent price drop was less than the 6 percent drop in Q3, and volumes were 26 percent higher than at the beginning of 2009, indicating that the bottom may have come to Vilnius as well.

Still, prices in Vilnius remain the highest of the three Baltic capitals. In Soviet-era residential districts, prices average €950 sqm, much higher than the €494 per sqm in Riga or €695 sqm in Tallinn residential districts.

The number of new apartments built in Vilnius in 2009 was 1,550, a substantial drop from the 5,600 built in 2008. In 2010, however, fewer than 300 new flats will be completed. If demand and transaction volumes continue to increase with the economic recovery, we could soon see a reversal in the market with demand soon outstripping supply once again.

City by city the price drop over the last two years has been 40 percent in Vilnius, 43 percent in Klaipėda, 42 percent in Šiauliai, 44 percent in Panevėžys, and just 27 percent in Kaunas.

Rents in Vilnius fell 38 percent since 2007. Today a 2-room flat in the centre of Vilnius rents in the range from €200 - €450 per month.

See also:

Back to Main News Page

EuropaProperty’s Back to Business Investment Forum to be opened by Warsaw’s Vice President

A new beginning for Warsaw’s Próżna Street

Dvintsev Business Center welcomes United Bakers