If until now, the new development market in Riga has clearly lagged behind Tallinn and Vilnius in terms of selection, transaction volume, and prices, this year a change is expected, confirms Kristjan-Thor Vähi, the head of Invego, a company developing large residential areas in both Latvia and Estonia.
Invego, which began preparations to enter the Latvian market six years ago, has, over the past two years, started the construction and sale of four residential areas. “We saw that the Riga real estate market has significant growth potential, and we want to be part of that growth,” says Vähi, adding that the company now has work in the Latvian capital and its surroundings for at least the next ten years.
According to Vähi, Invego has, for the first time this year, sold more homes in Riga than in Tallinn and its surrounding areas. “We currently have four active residential developments in both capitals and their outskirts, so it’s easy to compare progress. The result is not surprising, as Riga’s time seems to have arrived,” comments Kristjan-Thor Vähi.
Vähi notes that while prices for new developments in Riga are still lower, the gap between the two countries is narrowing. “Everything follows a familiar pattern – initially, sales move faster in so-called budget developments, but interest in higher-priced projects is also growing,” says Vähi, who adds that compared to Tallinn, Riga currently attracts more buyers of investment apartments due to today’s prices and loan interest rates. “In our higher-end development, Skanstes Rezidences, several apartments have been purchased by Estonian investors, who also seem to believe in the market’s growth potential. There has also been interest in investing in the Vitolu Parks residential area,” Vähi gives as examples.
