Latvia Real Estate
Rhiannon Williamson has found yet another interesting place
to invest: Latvia. Real estate has already seen record price
increases here. Find out why.
The Key to Successfully Investing in Investment Real Estate
in Latvia
By Rhiannon Williamson - 2007
With annual real estate price gains in the region of 40% achievable
from certain areas of the Latvian property market, surely the
key to successfully investing in real estate in Latvia is just
getting into the market right now and enjoying the record price
increases?
Well no actually!
While property price gains of 40% in parts of Latvia’s
capital city of Riga have been recorded and have resulted in
a surge of overseas investor interest in this new European Union
member state, the key to long term success is in understanding
the local Latvian economy.
Although Latvia is an attractive, interesting and historic
country of diverse geography which creates a stunning natural
environment for tourists to explore, it is not a tourism hotspot
and not a country trying to target tourism. Rather it is a country
with a government committed to transforming its economy from
the one paying the lowest wages in Europe to the one attracting
the largest amounts of foreign direct investment in the European
Union.
The success or otherwise of the Latvian government’s
commitment to improving levels of foreign direct investment and
boosting the local economy is key to the ongoing and long term
success of the investment real estate market in Latvia.
Why?
Because a real estate investor’s target audience –
whether for rental property or resale real estate – is the
local Latvian people. And if their government can continue to
improve their economy, push up GDP, increase the wealth of the
common man and make owning property a real prospect for more
and more Latvians as is their vision, then a real estate investor
buying into an incredibly cheap market now will have a growing
audience gaining in wealth status to target for his rental income
or equity appreciation in the future.
An indication that the Latvian real estate market is going
to prove successful and that property investors who carefully
select their investment real estate assets in Latvia will profit
from them over the medium to long term is that the mortgage market
in Latvia, which is in its absolute infancy, is gaining substantial
strength.
Interest rates in Latvia are incredibly low in real terms
and outstanding mortgage loan figures in Latvia are at least
40% lower than in other EU countries. This means that more and
more local and international lenders are becoming aware of the
huge potential for profit in Latvia and are beginning to enter
the marketplace – this should give an investor great confidence
for two reasons…firstly the financial institutions committing
to the mortgage marketplace are not in it for the short haul
and secondly the increase in availability and affordability of
home loans means that an increasing number of Latvians are being
afforded greater purchasing power and are gaining in financial
strength. Because, as stated, it is the local market that will
ultimately provide an investor with his target audience, this
bodes well for the long term profitability of property investments
made in Latvia today.
Reference Box: Rhiannon Williamson writes about real estate investment
in emerging markets worldwide. To read more about property investment
in Latvia click here. (Author; please contact us.)
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