In the northern city of Valmiera, real estate prices now reach and sometimes even exceed Rīga prices.

Banks, assessing the economic development of specific municipalities, have become more lenient in the regions, also issuing large mortgage loans. Meanwhile, in municipalities with lower economic activity, it is increasingly difficult to hope for mortgage loans.

Nevertheless, mortgage loan amounts remain fairlymodest in comparison with many other EU countries. In Vidzeme region, the average is around 40,000 euros, and the majority of loans were issued in the economically active Valmiera and Cēsis districts. The situation is much worse in other local governments. 

“It seems that Valmiera is one of those cities where the prices of standard apartments are very similar to those in Rīga, and they have remained at a fairly high level because the supply is lower than the demand,” said Marika Toma, Head of Mortgage Lending at Swedbank in Latvia.

A typical client who takes out loans for the purchase of a home is a family man around the age of 30. Bank representatives indicate that the majority take out loans for the purchase of apartments, especially new or renovated properties. The private housing segment is also becoming more active, especially in Valmiera and its surroundings.

“The property is the secondary thing we take into account – quality, location, infrastructure. But the primary thing we look at is cash flow and whether the client has accumulated their equity during this period in parallel with expenses,” emphasized Māris Opincāns, Head of the Private Finance Department at SEB Banka.

Real estate experts point out that the regional housing market is increasingly influenced by the local economy and demand. Valmiera and Cēsis stand out against the background of other Vidzeme municipalities.

“Large companies operate here. There is good infrastructure for families, schools, sports opportunities, cultural opportunities. And taking into account these factors, there is also a high demand for housing and sometimes prices can even exceed prices in Rīga,” explained Daiga Blumberga, manager of the Valmiera branch of the “Latio” real estate broker.

The real estate market in smaller municipalities depends on the availability of jobs, the well-being of residents, well-organized infrastructure in the municipality, quality entertainment and educational offerings, as well as whether quality housing stock is available at all.

“If we assume that a three-room apartment is around 50–60 square meters, then it would cost from 50,000 to 100,000 euros. In Gulbene, Alūksne, Madona, and Balvi, it must be said that the prices are lower. There, a three-room apartment would cost around 40,000 to 60,000, maybe 70,000 euros,” said Guna Pūcīte, a real estate valuation specialist at Arco Real Estate.

In Valmiera, three-room apartments in a recently renovated and completely rebuilt apartment building cost over 170 thousand euros and all of them have been bought. Experts indicate that residents from Rīga and its surrounding area with good incomes are moving to Valmiera. Forecasts show that real estate prices in Valmiera and Cēsis will remain at the Rīga level in future.

The situation in less developed parts of the country will depend on the creation of new jobs, attracting new companies and infrastructure development.