Investing in capital cities: riga
With a growing reputation as a great place for stag parties, Riga is a popular destination for weekend pleasure seekers, but also on offer are eclectic architecture, historic monuments and a wonderful Old Town. So, is Riga the Bangkok of the Baltic, or does its appeal lie deeper than that?
Brivibas Piemineklis (Freedom Monument)
Fast Facts
Country: Latvia
Population: 727,578
Area: 307.17 km² (119 sq mi)
Currency: € Euro
Official Language: Latvian & Russian
Telephone Code: +371 67
Location Information
Situated on the Baltic Sea Coast, on the mouth of the river Daugava, Riga has a population of 800,000, making it the largest and most cosmopolitan city in the Baltic States.
The Historic Centre of Riga has been declared a UNESCO World Heritage Site and the area is particularly notable for its extensive Art Nouveau (Jugendstil) architecture, which UNESCO considers to be unparalleled anywhere else in the world.
During Riga's 800-year history Russians, Germans, Swedes and Poles have all fought for control of the city. Even today Latvians remain in a minority in Riga, outnumbered by ethnic Russians.
What's the Attraction?
Riga has gained a reputation over the last few years as a place for hedonistic behaviour, with its strip Bars, Casinos and lively nightclubs having gained notoriety around Europe - possibly as a reaction to 50 years of communism. But this vibrant city has much more to offer than booze, beauties and ballistic beats.
Riga's Old Town is a montage of history, with its medieval wonders, cobbled streets and 20th century Art Nouveau districts. The view of the Old Town from across the Daugava River is spectacular and the skyline is pierced by the spires of the numerous churches and cathedrals.
Neatly dividing the Old Town and New Town is the Bastejkalns Park, with its lazy canal, cafés and zigzagging walkways. In the middle of the park is the Freedom Monument, one of Riga's, and indeed Latvia's, most poignant sites. This iconic figure was paid for and erected by the citizens of Riga in 1935 and is a symbol of both the nation's fight for independence and the four decades of resistance to an oppressive communistic regime.
A popular local joke during the Communist era was that the monument was really a travel agent, since laying flowers at it guaranteed a one-way ticket to Siberia.
Riga Architecture
The Old Town is an architectural journey through the centuries, where Gothic, Renaissance and Art Nouveau often compete for attention on the same street.
Recognised sights include the capacious religious twins of St Peter's Church (which is dedicated to the city's patron saint) and the Dome Cathedral (the largest church in the Baltics); both are structures of some magnitude.
Riga also boasts numerous museums, with the Latvian War Museum (a reminder of the ravages of the two world wars), the Occupation Museum (which traces both the brief Nazi occupation and the decades of Soviet rule) and the Mentzendorff House, an impeccably restored late 17th-century merchant's house.
Infrastructure & Investment
After a period of high capital growth and an extremely active market, the property scene in Riga has started to cool slightly.
Between 2004 and 2006, the average price in the city Centre rose by 138%. But now there are signs of a slow down as investors demonstrate a more cautious approach to buying, following recent government changes in capital gains laws and mortgage policies being implemented to tackle high inflation.
Riga's tourist trade is ever growing, with low cost airlines regularly offloading hordes of weekend revellers looking to gorge themselves on the vibrant nightlife. But the city is served by only one international airport and air traffic there has doubled between 1993 and 2004, so the need for expansion is imminent.
Public transportation in the city is served by a large fleet of trams, buses and trolleybuses on an extensive network of routes across the city. Riga is connected to the rest of Latvia by trains and there is also an international rail link to Russia.
The Riga Property Market
Entry level - The Kengaraga complex is located in an up and coming area on the outskirts of Riga. The building itself ranges from 5-7 storeys, with 299 apartments. Prices start at £47,732.
Mainstream - A one bedroom apartment located in a recently renovated building, on Eksporta Street 12, in the city Centre. Situated on the fifth floor, with views over the River Daugava, this building also has an elevator and security staff on the ground floor. Asking price: £121,622
Top of the range - A stunning, 4 bedroom, 4 bathroom penthouse, located in the heart of Old Riga, with impressive views across the river. This character filled apartment, with a host of modern features, will set you back £1,295,998.
Rental Potential
Gross rental yields in Riga are low at around 4.77% to 5.43%, although the city's average monthly rent has risen by about 54% due to an insufficient supply of rental apartments.
Conclusion
A city with a turbulent past of Nazi occupation and Soviet rule, Riga is now embracing its freedom and looking to the future with renewed optimism.
And nothing reflects the Change more than the property scene, where tired, old, cold, grey communistic buildings are being replaced by new, bright, colourful apartments. So, while the desire to visit the city increases, the demand for properties should continue, making it an environment that could still offer buyers a liberating return on their investment.
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