Latvia has earned the unfortunate moniker of the world’s worst residential property market after a survey by Global Property Guide suggested values fell 50 percent in the first quarter of the year.
The massive drop mirrors a terrible slide in the economy, which shrunk 18 percent in the same period.
The guide says average apartment prices in capital city Riga have fallen to $1058 a square metre, which is 50 percent down on the same time last year.
Yesterday, Latvian prime minister, Valdis Dombrovskis, rejected talk of a currency devaluation for the lat and promised to consider more spending cuts.
Some private equity real estate firms have been active in the country’s commercial property. For example, last year Swedish firm East Capital bought out joint venture partner Arco Vara’s 50 percent interest in AVEC Asset Management, which manages AVEC Baltic Property Fund and Arco Baltic Real Estate Portfolio with assets of €220m. AVEC Asset Management has invested in office buildings, shopping centers, wellness centres, hotels and industrial buildings in Latvia as well as Estonia and Lithuania.