Latvia’s residential property market is witnessing a sharp acceleration in prices, with existing homes leading the rally even as housing transactions lose momentum and mortgage rates begin to rise again. Apartment prices in the capital, Riga, increased 13.1% year-on-year in September 2026, while nationwide house prices recorded double-digit growth for the third consecutive quarter.
According to Global Property Guide’s Latvia Residential Real Estate Market Analysis 2026, the average asking price of standard-type apartments in Riga reached €978 per square metre in September, compared with €865 per square metre a year earlier. Prices increased 0.6% from August and were approximately 9.6% higher after adjusting for inflation.
The pace of appreciation marks a significant shift from the slower recovery seen previously. Apartment prices in Riga rose 4.1% during 2025, but by September 2026, they had climbed 10.3% above their December 2025 level.
Nationwide, residential property prices rose 11.4% year-on-year in the second quarter of 2026 and 3.9% from the preceding quarter, according to Latvia’s Central Statistical Bureau data published through official statistical channels. Adjusted for inflation, prices increased approximately 7.7% annually.
Existing Homes Drive Price Growth
The increase has been considerably stronger in the resale market than in new residential developments. Prices of existing dwellings rose 13.3% year-on-year in Q2 2026, compared with growth of just 1.7% for newly built homes.
In Riga, the average advertised price of new-build apartments reached €3,220 per square metre in the second quarter, up 5% from a year earlier. However, actual transaction prices were 16% lower than advertised prices and had edged down year-on-year, according to property consultancy Latio.
Supply conditions are contributing to the divergence. The number of existing apartments listed for sale in Riga fell 15% year-on-year in September, while listings in the city’s largest housing estates declined 20%. At the same time, the supply of new-build apartments has expanded, giving buyers more options in the primary market and limiting price increases.
Price growth has also extended beyond the capital. In September, standard-type apartments in Ogre averaged €977 per square metre, while Salaspils recorded €913 per square metre. Prices in Kauguri, Jurmala, reached €887 per square metre, and Jelgava averaged €807 per square metre.
Transactions Lose Momentum in 2026
The price rally follows a strong year for housing sales in 2025. Latvia recorded approximately 28,000 housing transactions, an increase of 7.5% from 2024, according to Latio. Apartment sales in Riga rose 19% to 11,650, reaching their highest level since 2007, according to property data firm Cenu Banka.
However, activity has weakened in 2026. Apartment transactions nationwide increased just 0.4% year-on-year in Q1 before declining 4.4% in Q2. During the first half of the year, transactions were down 2.1% compared with the corresponding period in 2025.
The slowdown has coincided with renewed pressure on borrowing costs. The average interest rate on new housing loans reached 4.39% in August 2026, according to European Central Bank data. The rate had fallen to 3.79% in Q4 2025 before beginning to rise again.
The ECB raised its deposit facility rate twice in 2026, including a September increase that took it to 2.5%. Despite higher borrowing costs, outstanding housing purchase loans in Latvia reached €5.94 billion in August, up 9.2% year-on-year.
Construction Expands as Immigration Rules Change
Residential construction is increasing, potentially easing some supply constraints over time. Latvia issued permits for approximately 7,000 dwellings in 2025, up 37.4% from the previous year and the highest number since at least 2015. Permits continued to rise in the first half of 2026, particularly for multi-unit residential buildings.
Meanwhile, a major regulatory change has altered the market for foreign investors. Latvia’s new Immigration Law, effective September 15, 2026, ended the option of obtaining residence permits through property purchases. Existing permits remain valid, and applications submitted before the law took effect will be processed under the previous rules.
The change comes as Latvia’s economy shows signs of improvement. Real GDP grew 3.5% year-on-year in Q2 2026, following revised growth estimates of 0.5% in 2024 and 2.4% in 2025.
For the housing market, the combination of rising prices, reduced resale inventory, expanding new-build supply and higher mortgage rates presents a mixed outlook. While limited availability of existing apartments continues to support valuations, slowing transactions and rising financing costs could test buyer demand in the coming quarters.
