Many newly established families decide in favor of acquisition of standard-type apartments

Currently the bank DNB is funding the acquisition of every fifth dwelling in Latvia that is purchased on loan, or, to put it in other words, ~20% of all long-term loans at Latvian credit institutions are drawn through DNB.

Like before, the biggest number of transactions refers to serial apartments’ segment, which comprises some 50% of all deals. After considering the economy growth ratios over H1, one can observe three main facets that are of importance to the to-be owners of standard-type apartments: rise in the apartment prices, changes in the prevailing choice of neighbourhoods and extended lending options. In response to the considerable demand for standard-type apartments, the bank DNB has increased the accessible funding up to 85% of the apartment value with the maturity of 15 years. If the buyer wants a longer loan maturity that exceeds 1 5years, the accessible funding shall amount up to 80% regardless of the type of the serial design. Moreover, families with children are eligible to Altum government support program to reduce the down payment even further.
 
Good to know: most popular housing estates and apartment designs
For the new apartment to comply with the majority of wishes and needs, before purchase one should acquire thorough information about the neighbourhood and the building it is situated in as well as about the accessible infrastructure and, for example, recreational and amusement options. According to the top real estate surveyors, as of the date:

• In highest demand among all housing estates of Riga are Purvciems, Ķengarags, Pļavnieki, Imanta, Āgenskalns, and Ziepniekkalns;
• The buyers mostly opt for standard-type apartments in Lithuanian design projects, 602^nd series and so-called “Khrushchyovkas” with the floor-space that varies between 40 and 60 square meters.

 
Which multi-apartment dwelling house design to choose?
Here is some more information about the most popular serial multi-apartment houses:

• Lithuanian design houses comprise five floors and are built from concrete panels with gypsum concrete partition walls. Houses that were erected over the first half of 60-ties boast balconies, while their newer counterparts - loggias. One should note that these houses never have an elevator. They are located in nearly every housing estate of Riga with serial building (in particular, in Imanta and Ķengarags), except for Zolitūde;
• Houses of 602^nd design as a rule have 9 floors. Their load-bearing walls consist of haydite-concrete panels and concrete overhead panels. Houses built around middle of 70-ties boast balconies, while newest models - loggias. They are typical for all neighbourhoods of Riga with serial building;
• “Khrushchyovkas” have 5 floors and, similarly to the Lithuanian design buildings, no elevator. Houses are built from concreate panels, with or without balconies. Please, note that the flats are smallish and with communicating rooms. Like the buildings of 602^nd series, “Khrushchyovkas” are typical for all dwelling areas of Riga.

 
Standard-type apartment is a smart choice in long-term run
People who have opted for a flat in standard-type multi-apartment houses point out that the acquisition has given them several benefits: 

• Improved adjacent territory, e.g. children playgrounds;
• Well-arranged public transportation infrastructure and nearby parking lots;
• Wide choice of Internet, cable TV and landline communication operators;
• Proximity to kindergartens, schools and medical treatment facilities;
• Possibility to acquire the “gifts of the nature” at local farmers’ markets;
• Accessibility of shopping centres and amusement possibilities;
• Socialization options with neighbours.

 
“Measure thrice and cut once” or things you should consider before making a decision
Credit officers of Latio, Ober-haus and Arco before the acquisition of an apartment advise to comprehensively assess as much information as possible to facilitate the choice and avoid purely emotional decisions. DNB recommends before the acquisition of an apartment to thoroughly consider the facets as follows:

• Location of the building (distance to one’s office, school, medical treatment facilities, and shops);
• Size of the apartment, number of rooms and modern conveniences;
• Existence of a lift and balcony;
• Existing infrastructure and environs (general security level at daytime and at night, playgrounds, proximity of parks or woods);
• Traffic and parking options;
• Technical condition of the building (outer walls, basement and roof coverage);
• Compliance of the flat with the design (in case of differences requesting an approved design);
• Contacts of utilities services’ providers and amount of payments per precedent periods (the buyer is entitled to request any previously drawn invoices).

 
Choose a comfortable everyday life! Before acquiring an apartment the professionals recommend to find out, e.g. whether the building has been exposed to mildew and/or humidity and when the sun will shine in your windows. Likewise, it would be of assistance to meet the neighbours not only to timely socialize, but also to find out any pitfalls.
 
To rent or to buy - that is the question
When you plan to move to a new place, you face a choice between renting and buying it. The real estate market experts emphasise that frequently people choose the former option and rent a flat, as it is quite common to think that an acquisition is beyond one’s reach. On the contrary, as currently the Government guarantee program to the families and mortgage loans offered by banks see to the fact that a dream about one’s own apartment is coming true. Here are the reasons:

• The bank DNB grants loans in amount of 85% of the apartment value, meaning that the down payment will comprise just 15% of the total costs;
• Credit (i.e. mortgage loan) on the property acquisition is granted for 20 – 25 years - monthly payments (loan principal and interest) are commensurate;
• Up-front fee for the loan execution does not apply/is reduced. 

 
Acquisition of the apartment secures obvious benefits
Rent means that the tenant is free from long-term obligations, which may not be preferable from the economic point of view. Likewise it should be stressed that one’s own apartment adds to the security feeling. According to the actual DNB data, the average rent for a two-room apartment (40 sq. m) within the confines of the extended downtown area amounts to EUR 200 per month. In long-term run it comprises the costs as follows:

• Over one year the tenant will pay to the owner EUR 2,400 on average;
• Over 10 years the rent will cost EUR 24,000.

 
According to the above, in long-term run it is more cost-effective to acquire a serial apartment instead of renting it.