An experienced real estate developer based in Riga, Latvia is in the process of developing a contemporary 8-flat apartment building in the well-established residential district of Imanta. The Imanta district is almost like a city within a city, with all the necessary amenities, such as schools, grocery stores, recreational facilities as well as picturesque woodland areas located within. At the same time, it is within easy reach by car or public transport of Riga’s buzzing city centre for those commuting to work there. It is therefore no surprise that people choose this district to call their own and settle living there in the long term with their families.
The developer has worked on numerous development projects across the city of Riga for over a decade already and knows the ins and outs of the trends and demands on the market.
The current project that he is working on therefore takes into account all the possible obstacles that prospective buyers might face, when choosing to buy one of the flats in the development, among them the following:
1. The developer has invested his own funds to acquire the land plot in Imanta district as well as carried out the building works to build to the current stage an apartment building, which includes 8 flats across 590 square meters and 8 parking spaces (please see photos and videos);
2. The evaluation of the building in the current stage (including the value of the land plot) is estimated to be €180,000;
3. The cost of construction works that still need to be caried out are estimated to be €332,163.20 plus an additional €15,000 will be necessary for drafting the necessary project documentation and having the building certified by the local authorities;
4. The estimated resale price is in the region between €800,000 and €920,000, as the prices for new flats for sale in the area currently range between €1,300 and €1,450 per square meter;
5. The developer is planning to carry out the necessary building works in three stages, therefore funds will also be sourced in three stages – with the first stage being now, the second projected for December 2020/January 2021 and third for February/March 2021.
The developer is currently looking to raise €110,000 in financing with a minimum target of €100,000. For their trust and generosity, investors investing in this project will be given an 17,3% annual interest rate paid out in monthly payouts throughout the loan term of 12 months.
Interest rate payments start calculating from the day you make your investment!
The following pledges secure the loan:
The sales of residential properties in Latvia have been on the rise in recent years, with especially strong demand reported for economy and middle-class apartments because of a lack of adequate supply due to high construction costs. The biggest developers report a positive trend of up to 80% apartment reservations before completion of a building. Ober Haus reports that in 2019 Riga saw a 3.5% increase in apartment sales with an average of 788 apartments sold in Riga each month.
A boost to residential property sales has in part been provided by the support programme for housing for families with children established by the Ministry of Economy a couple of years ago, which guarantees a significant share in the loans granted by banks to these individuals acquiring residential properties.
In 2020 the support has been extended to also include professionals under the age of 35, who have obtained secondary or higher education, which means there should be a further increase on demand of residential properties.
It has been reported that almost half of all new home loans granted in the past two years have been covered by government guarantees. This means that buyers, who were previously facing issues with financing or were unable to prove the origin of their money to secure a first instalment for a bank loan or to buy a property outright, were now able to benefit from the government scheme.
There has been an upward trend in prices for both old construction buildings, as well as new construction apartments located in residential districts. According to Ober Haus, prices for apartments in Soviet-era buildings increased by 3.3% and stood at an average of 808 euros per sqm at the end of 2019, while prices in new projects in the same locations were ranging from 1’550 euros to 2’100 euros per square meter.
With Latvia being one of the very few countries, which has not seen huge adverse effects of the pandemic that is currently raging across the world, there should not be expected to be a fall in residential property prices due to the Covid-19 effects.