Real estate on the coast of Latvia: possible, but there are additional conditions

“During the first COVID-19 pandemic, both Lithuanians and Latvians were pessimistic and expected a sharp drop in property prices, which did not happen. House prices have risen in both countries, but we are also seeing some differences. For example, in Lithuania, property prices on the seashore have risen considerably and the average per square meter. M The price of housing in Palanga is currently even higher than in Vilnius. Meanwhile, housing in Latvia is the most expensive and the demand is highest in Riga, ”said Tomas Pakėnas, Head of the Loan Department at Luminor Bank.

According to T. Pakėnas, both in Lithuania and Latvia there is a growing demand for private houses with a separate courtyard. Young people between 30 and 35 years of age usually look for this type of housing. old families.

“The routine of the population has changed, so they needed a different type of housing. This year, young families are especially actively looking for a larger area of ​​100-150 square meters. m of housing with its own patio. Lithuanians choose such real estate taking into account the price-quality ratio, they are not afraid of houses of older construction, they are inclined to repair them, if only it allows them to save. Meanwhile, Latvians tend to choose newer and fully equipped houses, where they could move into immediately, ”said T. Pakėnas.

According to the press release, if Lithuanians buy real estate in Latvia with their own funds, they must go through the usual procedures: enter into a contract for the purchase and sale of real estate, to be certified by a notary. It is also possible to borrow from a bank when buying real estate abroad, but additional conditions apply.

“The same rule applies in all Baltic countries: a mortgage loan for the purchase of real estate can be granted to a person who lives, works and buys a house in the country where he borrows. For example, if a Lithuanian wants to borrow borrowed funds from a bank in Latvia, the financial institution will ask you to present your employment contract or other documents proving that you reside in Latvia. A bank operating in Lithuania would ask the same if a Latvian citizen applied for a home loan “, T. Pakėnas said.

It’s easier to borrow from a local bank to buy a home abroad, but this requires additional collateral.

“You can get a loan for the purchase of real estate abroad through a loan for ideas, but the mortgaged property must be in Lithuania. This means that the borrower, when guaranteeing the repayment of the loan, must pledge the residential real estate already located in Lithuania, the value of which would determine the size of the possible loan. Documents showing the payment of the share of equity must also be submitted to ensure the implementation of the Responsible Lending Provisions, ”said an expert from Luminor.

However, for those who rely on affordable housing or a summer house on the Latvian coast, there is little knowledge. On Lithuanians’ favorite but sparsely populated stretch of beach just outside the border, there is virtually no supply, and old-fashioned apartments are for sale in Liepaja. It is true that the price is very low: the average price is only 927 EUR / m2. subway. Several old houses are also affordable: the average price is 984 EUR / m2. subway.

“There is a greater supply near Riga, but the prices are also much higher. For example, according to data from the Latvian real estate ad portal city24.lv, the average of 100-200 square meters M. m house price in Jurmala is 1864 EUR / m2. m, and according to the aruodas.lt portal, housing in the same area in Palanga costs an average of 2007 EUR / m2. m, ”said T. Pakėnas.