Buying Property in Latvia?
Great info about buying Latvian property!

Latvian property prices are amongst the lowest in Europe, with a habitable property on the market for the price of a modern car, starting at 17,000 Euros. With prices this low, it isn’t surprising that annual growth is very healthy in this area of Eastern Europe. Over the last five years, the average annual growth in property prices has been 20 percent and this is set to continue for the next ten years as Latvia becomes more widely recognised as an investment and holiday destination.

With these sorts of growth rates, a property purchased for a little over £5,000 could top £200,000 in the next decade. It is a wonder that more investors aren’t flocking to Latvia, as purchasing is allowed for foreigners and an 85 percent mortgage can be achieved for between 4.5 and 5.5 percent interest rate, which is favourable to most offers in other European countries.

Buying Property in Latvia

Some parts of Latvia are already enjoying huge growth in property prices. Riga, the capital of Latvia, has seen explosive growth of more than 40 percent recently, which is likely to continue for the foreseeable future.

One thing to bear in mind with Latvia is that it does not have a booming tourist market and neither is it trying to become one. Therefore, the short-term rental market is not as extensive as other tourist hotspots, across Europe. This is not to say that the rental market is not solid in Latvia, but those investing in property in Latvia will have to take a slightly different approach.

The Latvian government is really committed to growing the economy of the country and the combination of low wages and well-educated individuals has led to Latvia becoming the country attracting the largest amount of direct foreign investment, within the European Union.

Investing in property in Latvia requires investors to take an entirely different approach to investing. Instead of purchasing a property and renting it out to the holidaymakers, an investor in Latvia is investing in the future of the country. By buying a property in this country, as prices are so cheap, then waiting for a few years while the locals become wealthier due to the inward investment; investors should also be aware that property prices are likely to rise several-fold.

Mortgages in Latvia are still relatively new and it is this that has been stifling the property market somewhat - until recently. Currently, interest rates are incredibly low in Latvia, on average 40 percent less than other European Union countries.

Latvia has very little in the way of natural resources and relies heavily on both the manufacturing and service industries. As Latvia is so linked to the Russian economy, it suffers from the same downturns as its neighbour. The financial crisis that hit Russia, in 1998 did have a negative effect on Latvia, although the government in Latvia has made a serious effort to reduce its links with Russia and become more independent. Since then, Latvia has become much more stable and the economy has grown steadily. It is expected that the Euro will become the official currency of Latvia in 2008.

Investing in property in Latvia is not just a belief that property prices are likely to rise, but also a belief that the country of Latvia is on the way up, economically, which seems to be a solid bet for any savvy investor.