Since 2005, agricultural land prices have increased 20 times

Since 2005, the prices of agricultural land have increased 20 times, but since 2020 the price has increased by 40%, according to the representatives of the real estate company “Latio”. The company states that the market of agricultural lands and forest properties is currently one of the most active, but potential business participants currently do not have publicly available objective information about developments in these market segments. The average annual rental fee for agricultural land in Latvia in December was 170 euros per hectare (in November – 160 euros per hectare), while the highest annual rental fee for agricultural land in Latvia was 330 euros per hectare (in November – 320 euros per hectare). On the other hand, for forest properties, the average amount that buyers paid to the owner from the real market value, keeping the rest for themselves, was 60% in December (45% in November). At the same time, 60% of sellers sold property below the market price (65% in November). “Latio” informs that it takes an average of 15 minutes from the moment of publication of advertisements to the first offer of a buyer. Evaluating the collected data, “Latio” concludes that the selling price of agricultural land has increased slightly in December compared to November this year – by an average of 2%, but the rental fee for such properties has also increased by approximately 10 euros per hectare. Sandy Lukin, Head of Latio’s Forest Sales Department, explains that agricultural land, due to its limited availability, is currently considered one of the most profitable types of property in the world. Therefore, the price increase in this market in Latvia is only natural. Lukin emphasizes that the figures may not be large in a month, but if you look at them over a period of several years, the increase is significant. For example, if you compare current prices with 2005, the average sales price for agricultural land properties in the country has grown by 1100.8%, reaching 4242 euros per hectare. At the same time, Lūkins points out, each region has its own specifics, for example, prices for agricultural land properties in Zemgale will always be significantly higher than in Vidzeme. The price level in Latvia is still significantly lower than in neighboring countries, such as Estonia, not to mention the old EU member states.

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