Riga apartment - keep or sell?

T

thomsk

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Hi everyone.
I have a friend who bought off-plan in riga c. 18 months ago. She is wondering what to do with it now, ie keep or sell. Anyone know this market, as I am not familiar with it- any objective advice would be appreciated.
 
If purchased 18 month ago you will have seen some very good price growth and it is this rapidly rising price growth that made the government introduce rules to slow down house price inflation and prevent a hard landing. For example you must have minimum deposits instead of borrowing 100% which you could do in the past. This has stopped unsustainable price rises and made it difficult to sell at the moment. Therefore the rental market is now very buoyant.

In my view it makes sense to hold on and rent for the medium term rather than panic sell. Locals wages are rising fast, the rules introduced to slow down growth (which is a good thing for the long term investor) should be relaxed in future allowing steady growth which with good gearing will provide further profits.
 
Thanks for that, Oso. That seems like sound advice. I was thinking along the lines that she should avoid panic selling and let the market settle. Also to keep for long-term and avoid trying to make quick bucks if she can afford to hold!
 
I would agree. I bought off plan 2 years ago and it is actually just completed now 5 months behind schedual. During 2007 i saw the price of my apartment go up by as much as 100% while currently the selling price for similar unsold units is about 70% above what i paid. This is still an unrealistic price and if i was to try and sell now i dont believe i would get this asking price.

Also a word of warning to other folks-i found it extremely difficult to secure finance for this property even though the amount i was looking for is absolutely tiny compared to a typical Irish mortgage. Some banks did not want to know because i am non resident, others wanted a Latvian resident to go guarantor, some just would simply not even talk to me.

The 2 biggest domestic Latvian banks fell into either of these categories. One just straight told me that from July 2007 they were not accepting any non resident customers. I finally found a bank willing to talk to me and accept an application but as i type I have still not actually secured the loan however I am pretty confident.
 
Rey77 said:
I finally found a bank willing to talk to me and accept an application but as i type I have still not actually secured the loan however I am pretty confident.
Click to expand...
What happens is you can't secure the loan?
 
Howitzer said:
What happens is you can't secure the loan?
Click to expand...

Hah-panic!

Just back from meeting with bank in Riga and i think i will be ok-as regards info about banks- thomsk maybe drop me a pm here-dont think i can go into that on the open forum
 
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