RIGA - Real estate prices will fall to 15 percent of their 2007 peak recorded during the property boom, warns Chairman of the Board of real estate company Latio, Edgars Sins, reports news agency LETA. He goes on to say that his company "is forecasting that the real estate market will bottom out this autumn and then will resume its growth." Sins says, however, that such a forecast is being made in an environment of "total lack of certainty in the banking system" right now, with a real estate market still in contraction world-wide. Company analysts believe that people with extra cash may reconsider whether to "deposit it with the banks, or invest in real estate instead." "Already, renting out small apartments, small premises for shops or offices is equally as profitable as putting your deposit in the bank," says Sins.
The property entrepreneur says that at the moment banks are not playing any major role in the real estate market. "Banks are not providing loans for real estate. They are only gradually taking away the property from homeowners and companies that cannot meet their debt commitments. The only thing we'd like is for banks not to kill the market by putting these properties back on the market, after we see the first 10 or 15 percent price increases," he added.
Sins also feels that foreign interest in Latvian real estate could return. He says that "It is never the case where there is no interest at all. There are always people with money, those who are willing to consider the options to buy, sell or rent, as long as it can bring a profit."
