Riga’s Housing Market: Lowest Prices, Highest Rental Yield in the Baltics

For Latvian residents, real estate remains the most significant asset, according to OECD data. Nearly 54% of households have their primary residence as their main wealth, and another 30% own other property such as land or rental apartments. This is the highest rate among OECD countries and contrasts sharply with Lithuania and Estonia, where only about 18% of households invest in a second property.

Riga is currently attractive to investors because housing prices are lower than in Vilnius and Tallinn. According to Eurostat, over the past year, housing prices in Riga rose by 11%, in Vilnius by nearly 14%, and in Tallinn by 5%. Price levels differ significantly: new apartments in the city center average €3,500 per square meter in Riga, compared to €7,030 in Vilnius and €4,590 in Tallinn. Outside the center, Riga averages €2,730, Vilnius €3,775, and Tallinn €3,100. In the secondary market in neighborhoods, Riga prices are almost 2.5 times lower than in Vilnius and twice as low as in Tallinn.

Moreover, Riga leads in rental yield with an average of 6.5%, while Vilnius hovers around 5% and Tallinn at 3.3%. Considering the Bank of Latvia’s inflation forecast of about 3% this year and last year’s price surge, prices for quality housing are expected to continue rising. However, experts warn that not every purchased apartment is a good investment. Location, technical quality, and maintenance costs are crucial.

In June, prices in the primary market for new projects in Riga remained stable. In the city center, new builds averaged €3,500 per square meter, in neighborhoods €2,730, and renovated pre-war buildings in the center just over €3,000. In the secondary market, prices in the center reached €2,870/m², in neighborhoods €2,330/m². There were 2,275 apartments available in new buildings, with supply increasing by 8%. Series housing prices remained stable: around €1,170/m² in neighborhoods and €1,550/m² in the center.