Bonava: A fairly strong price increase is expected in the future

The Covid-19 pandemic has not had a significant impact on the activity of the real estate market, says Mareks Kļaviņš, chairman of the board of the real estate developer “Bonava Latvija”. At the same time, he predicts a fairly strong rise in prices in the future. M. Kļaviņš said that the second quarter “fell out” last year, which was the time when people adapted to the new situation – everything was new, this situation was also new for the banks. “Caution prevailed, banks were busy extending loans and granting credit holidays. As the banks themselves admitted, many people applied for holidays and extensions out of fear of a possible economic crisis, even if it was not really necessary. On the other hand, already in the third and fourth quarters, everyone got used to the new situation and the market It is clear that the situation in any area of ​​life is not the same as it was before the Covid-19 pandemic, and we will not return to it for a while, but there is no significant impact on the real estate market,” Kļaviņš said. He said that no corrections have been observed in property prices either. “There is no valid reason why they should have decreased. Construction costs will not decrease in our new projects, this year additional costs are caused by the new energy efficiency requirements, all this only increases costs. It can already be predicted that a fairly strong price increase is expected in the future. The question is how much the market will be able to absorb it quickly,” said Kļaviņš. He added that this will definitely be a year of change, it will definitely be affected by the fact that developers will still build some projects with the old building permits and according to the old requirements, where the costs will not be so high, but there will also be new projects with new requirements. Asked how the increase in construction costs and price increases will affect the market as a whole, Kļaviņš said that it will be a big challenge. Developers face this every year as construction costs increase every year. Read the full article here.