Market Insights Financial Real Estate Residential Real Estate

Residential Real Estate Leases - Latvia

Latvia

The revenue of the Residential Real Estate Leases market market in Latvia is projected to reach US$0.96bn in 2024.
Apartment Leases dominates the market with a projected market volume of US$0.81bn in 2024.
The revenue is expected to show an annual growth rate (CAGR 2024-2029) of 0.82%, resulting in a market volume of US$1.00bn by 2029.
The demand for residential real estate leases in Latvia is increasing due to the growing expatriate population.

Key regions: Japan, China, Australia, Germany, United States

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Analyst Opinion

The Residential Real Estate Leases market in Latvia has been experiencing significant growth in recent years, driven by customer preferences, market trends, local special circumstances, and underlying macroeconomic factors.

Customer preferences: Customers in Latvia have shown a strong preference for residential real estate leases due to the flexibility and affordability they offer. Renting a property allows individuals to have a place to live without the long-term commitment and financial burden of purchasing a home. This preference is particularly evident among young professionals and students who prioritize mobility and do not want to be tied down to a specific location.

Trends in the market: One of the key trends in the Residential Real Estate Leases market in Latvia is the increasing demand for rental properties in urban areas. Cities like Riga, the capital of Latvia, are experiencing rapid urbanization and population growth, leading to a higher demand for housing. This trend is driven by factors such as job opportunities, educational institutions, and cultural attractions that are concentrated in urban areas. Another trend in the market is the rise of co-living spaces and shared accommodation. This trend is particularly popular among young professionals and students who are looking for affordable housing options and a sense of community. Co-living spaces offer shared amenities and common areas, creating a social and collaborative living environment.

Local special circumstances: One of the local special circumstances that have contributed to the development of the Residential Real Estate Leases market in Latvia is the high rate of emigration. Many Latvians choose to work and live abroad, leading to a higher demand for rental properties in the country. Additionally, the influx of foreign students and expatriates also contributes to the demand for rental properties.

Underlying macroeconomic factors: The economic stability and growth in Latvia have also played a significant role in the development of the Residential Real Estate Leases market. The country has experienced steady economic growth in recent years, leading to increased disposable income and improved living standards. This has made renting a property more affordable for many individuals and has contributed to the growth of the market. Furthermore, the low interest rates on mortgages have made it more attractive for individuals to rent rather than buy a property. This is especially true for individuals who do not have the necessary funds for a down payment or who prefer not to take on the long-term financial commitment of a mortgage. In conclusion, the Residential Real Estate Leases market in Latvia is experiencing growth due to customer preferences for flexibility and affordability, the trend of urbanization and co-living spaces, local special circumstances such as emigration and foreign students, and the underlying macroeconomic factors of economic stability and low interest rates.

Methodology

Data coverage:

Figures are based on total and average revenue of residential apartment leases.

Modeling approach:

Market size is determined by a bottom-up approach. We use national statistics, international organizations, and industry associations to analyze the markets. To estimate the market size for each country individually, we use relevant key market indicators and data from country specific industry associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita.

Forecasts:

We use a variety of forecasting techniques, depending on the behavior of the market, for instance, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.

Additional Notes:

Data is modeled using current exchange rates. The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war considered at a country-specific level.