The average price of flats in Jūrmala has increased by approximately 20% over the past year, according to a market study conducted by the Colliers International real estate agency. The reason for this is demand for real estate in the spa town which far exceeds the supply of flats, as well as the demand for flats in the centre of Rīga and Old Rīga.

Only 52 flats in new building projects were offered for sale in July of this year, while another 140 flats, albeit finished, were not put up for sale for various reasons. There have been very few new residential building projects in Jūrmala over the past three years, and it is also true that legal issues related to financiers and developers of projects have kept many apartments from being put up for sale.

“The deficit of offers along the shoreline in the central part of Jūrmala will probably remain in place over the next year because of limited land resources and offers,” predicts Colliers International partner Deniss Kairāns. “Later, though, the offers may become substantially greater in number, because there are lots of finished but unsold flats at this time, and a series of developers are planning in the near future to build apartment buildings that will satisfy the demands of potential buyers.”

Foreigners, particularly from the CIS, mostly demonstrate interest in real estate in Jūrmala. That is partly because of amendments to Latvian law which allow people who purchase real estate in Latvia to receive a residence permit.

This means that the total number of sold real estate objects since the second quarter of 2010 has increased by 20%.

There are two building projects in the central part of Jūrmala at this time which will offer 37 flats, among which 15 have already been reserved or sold. Outside the central part of the town, there are another three projects at a similar stage of development. They will offer 89 flats, and approximately one-third of them have been reserved or sold.

The price of new flats in new buildings in the central part of Jūrmala in June 2011 was between EUR 3,500 and EUR 9,000 per square metre, while elsewhere in Jūrmala it was between EUR 1,350 and EUR 2,900 per square metre.

In comparison to 2010, real estate prices on the shoreline have increased by 20-30%, and the price of one square metre in the most exclusive projects in the central part of Jūrmala, with the flats being fully finished with installed equipment and furnishings, is between EUR 4,500 and as much as EUR 9,000 per square metre.

80% of the transactions related to new projects occur in the secondary market, which means that flats are sold fully finished and with installed equipment and furniture. The greatest demand is for two and three room flats with floor space of 110 to 150 square metres. People particularly are interested in service and maintenance costs. Advantage is given to finished flats so that people don’t have to spend additional time and money in dealing with administrative and construction issues.

The largest number of registered transactions was seen in February and March 2011, this largely being due to a flow of foreign investors to Latvia during the New Year. Observations indicate that investors spend two or three days looking for an appropriate flat and that New Year and Orthodox Christmas holidays offer a good chance to seek out real estate. It takes two to three months to receive the residence permit and to register the property in the Land Register. This suggests that the number of real estate transactions may increase again during the fall of this year.

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According to the Office of Citizenship and Migration Affairs, 181 applications for residence permits were received between July 1, 2010, and April 1, 2011, on the basis of real estate purchases. 61 real estate objects were purchased during the same period in Jūrmala. 322 investors and family members received permits. The five-year residence permits mean that the investors and their family members can freely travel through countries which are part of the Schengen Agreement.