Demand for energy-efficient properties at record highs

Although it might seem that the position of many potential buyers in the current situation could be pending, in some cases even ten buyers apply for one property, says Ksenija Ijevleva, market analyst of SIA Latio. Currently, the demand for new real estate, especially modern and energy-efficient real estate, is very high, but the supply is limited, says K. Ijevleva, emphasizing that the Russian invasion of Ukraine had stopped the interest in buying and selling real estate only temporarily. Some buyers and sellers canceled transactions, there were also some interested parties who announced that they no longer want to buy property in Latvia because we are too close to the war zone, but such trends were observed only for about three weeks, notes the Latio market analyst. Taking into account the geopolitical situation and the rapidly growing inflation, how has the demand for real estate in Latvia changed in general? Demand for property remains high, but this has changed structurally. Currently, real estate that meets energy efficiency standards is in particular demand. It is clear to everyone that heating prices will increase significantly in the coming season, so people are actively looking for properties that would allow these costs to be reduced. Two years and a year ago, the first selection criteria were usually location, room arrangement, area and price, but now the primary thing that buyers are interested in is energy efficiency indicators. Sellers have also realized that it has become more difficult to sell energy-inefficient properties on the market, so they often involve professionals in such transactions. At the same time, it should be understood that there are very few energy-efficient properties in Latvia – if we talk about housing, they could be about 3% of the entire housing stock in Riga, but in Latvia, energy efficiency certificates of class A were awarded to only 1% of properties in 2021. This is a problem that we will have to solve together in the next few years, using alternative energy resources for heating houses or more actively continuing the renovation of apartment buildings. It will not be possible to do this until the next heating season, which is why the demand for ready-made energy-efficient homes is so huge. Of course, this trend is also taken into account by developers – practically all newly built multi-apartment buildings are energy efficient, as this is one of the most important advantages of selling property nowadays.

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