At the beginning of 2024, Latvia’s real estate market is experiencing significant changes. Economic and political factors, along with shifts in buyer behavior, will impact the market over the next two years. In this article, we will explore expert forecasts, highlighting key trends, opportunit Contact online >>
At the beginning of 2024, Latvia’s real estate market is experiencing significant changes. Economic and political factors, along with shifts in buyer behavior, will impact the market over the next two years. In this article, we will explore expert forecasts, highlighting key trends, opportunities, and risks that could influence the market, which will be important for investors, developers, and homebuyers.
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Economic Growth and StabilityLatvia’s economy continues to recover post-pandemic, and the projected GDP growth for 2024-2025 could boost confidence in the real estate market. Increased business activity and consumer confidence are likely to drive demand for both residential and commercial properties.
Inflation and Interest RatesAlthough inflation is a global issue, it is being carefully managed in Latvia. Central bank policies on interest rates will play a critical role. Lower rates could encourage homebuying activity, but if inflation pressures lead to higher rates, buyer activity could decrease.
Urbanization and Development ProjectsExtensive urbanization and development projects are underway in Riga and Jurmala, enhancing infrastructure and expanding residential areas. These projects can increase property values and attract both local and international investors.
Sustainable Living and Green BuildingsSustainability is becoming increasingly important in new developments. The Latvian government’s support for greener buildings and energy-efficient homes will boost demand for eco-friendly properties.
Remote Work and Lifestyle ChangesThe rise in remote work during the pandemic continues to influence housing choices. More people are seeking larger homes in suburban or rural areas that offer better quality of life and the possibility of setting up a home office.
Villa Astor, Jurmala.
Rising Demand in Secondary CitiesCities like Liepaja, Daugavpils, and Ventspils are becoming attractive investment destinations, offering lower property prices and high growth potential.
Recovery of Commercial Real EstateThe commercial property sector, particularly office spaces and retail premises, is experiencing a rebound. As businesses adapt to new conditions, the demand for modern office spaces equipped with the latest technology is growing.
Regulatory ChangesWhile government policies can create opportunities, sudden regulatory changes can also pose risks. Investors need to stay informed about possible tax reforms and other changes that could affect their investments.
Global Economic UncertaintiesLatvia’s real estate market is not immune to global economic fluctuations, such as geopolitical tensions and changes in EU policies, which could impact the local market.
Environmental RisksClimate change poses risks, especially for coastal properties. Rising sea levels and extreme weather events can affect property values and insurance costs in coastal regions.
Latvia’s real estate market in 2024-2025 promises to be dynamic and full of opportunities. By understanding the economic background, embracing new trends, and considering potential risks, investors, developers, and homebuyers can make informed decisions in this evolving environment. Stay tuned to our updates to learn more about the Latvian real estate market.
If you feel confused and don’t know what to do with your property, contact one of our agents, and we will help you find the best solution. You can find the agents’ contact information here – Contacts.
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Latvia''s corporate income tax (CIT) system has been in place since 2018. Latvia''s corporate tax structure exempts retained earnings. The CIT rate on gross distributed profits is 20 percent. Latvia is well connected by more than 100 direct flights to all major European cities.
The Latvian government is expected to spend about $12.3 billion (10.5 billion EUR) of EU structural funds in 2021-2027, which includes about $2.9 billion (2.5 billion EUR) Latvia will receive through the EU''s Recovery and Resilience Facility (RRF). The Latvian government provides several incentives for investment including in the areas of taxes, labor, research and development, and state credit guarantees. Please see the Latvian Investment and Development Agency (LIAA)''s website for detailed information on the available incentives and tax allowances. Detailed information on Latvia''s planned use of the RRF is available here: https://commission ropa /business-economy-euro/economic-recovery/recovery-and-resilience-facility/latvias-recovery-and-resilience-plan_en
The European Bank for Reconstruction and Development (EBRD) operates in Latvia out of its regional office in Vilnius, Lithuania. Latvia qualifies for U.S. Export Import Bank (ExIm) financed projects. The U.S. International Development Finance Corporation (DFC) is also able to support some energy projects in Latvia. Nordic Investment Bank announced the opening of its regional hub in Riga in August 2023.
Opportunities exist for expanding trade in various sectors, including energy, IT, forestry, farming, woodworking equipment, transportation (including aviation), agricultural products, and defense. Latvia is part of the $6 billion Rail Baltica greenfield rail transport infrastructure project that will connect Latvia, Lithuania, and Estonia with the European rail network. The project should be completed by the end of 2026. More details on the project are available here: https://
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