Riga continues to enjoy a significant pricing advantage in the Baltic residential property market. The average price per square metre in new developments in the city centre is around half that of Vilnius and nearly one-quarter lower than in Tallinn, while the price gap in the secondary market for new-build apartments is even wider. At the same time, Riga offers the highest average rental yield in the Baltics at 6.5%, according to an analysis by Latvian real estate agency Latio.

Although interest in a broader range of investment opportunities has increased in recent years, real estate remains the most important asset for Latvian households. According to OECD* data, nearly 54% of household wealth in Latvia is tied to owner-occupied housing, while an additional 30% consists of other real estate holdings, such as land or investment properties. This is the highest proportion among OECD countries and significantly differs from neighbouring Lithuania and Estonia, where only around 18% of households invest in a second property, with financial assets playing a much larger role.

Historically, real estate has been viewed by Latvians not only as a place to live but also as one of the safest ways to preserve wealth. Unlike financial instruments, whose value is influenced by global market fluctuations, property is seen as a tangible asset with practical value that can also provide protection against inflation when purchased wisely.

“For Latvians, owning property is more than just an investment. It represents security, social status and family wealth. Unlike financial markets, which many people still perceive as relatively abstract, real estate allows investors to see exactly where their money is. We continue to observe that many people prefer to invest their available funds in purchasing an apartment, buying land, renovating a home or acquiring an additional property,” said Latio market analyst Ksenija Ijevleva.

According to Latio, Latvia’s capital is currently in an attractive position for investors. Residential property prices remain below those in Vilnius and Tallinn, while Riga leads the Baltic capitals in rental profitability.

Eurostat data show that housing prices in Riga increased by 11% over the past year, compared with nearly 14% in Vilnius and 5% in Tallinn. Despite this growth, Riga remains considerably more affordable. The average price of newly built apartments in the city centre stands at approximately EUR 3,500 per square metre, compared with EUR 7,030 in Vilnius and EUR 4,590 in Tallinn.

Outside the city centre, new developments average around EUR 2,730 per square metre in Riga, compared with EUR 3,775 in Vilnius and EUR 3,100 in Tallinn. The difference is even more pronounced in the secondary market, where apartment prices in Riga’s residential districts are almost 2.5 times lower than in Vilnius and roughly half those in Tallinn.

At the same time, Riga offers the strongest rental returns among the Baltic capitals, with an average gross rental yield of 6.5%, compared with around 5% in Vilnius and 3.3% in Tallinn.

According to Ijevleva, Riga currently stands out among both domestic and international investors due to its relatively low entry prices and higher income potential. Combined with the Bank of Latvia’s inflation forecast of around 3% this year and the strong increase in housing prices during the previous year, quality residential property is expected to continue appreciating.

However, she cautioned that not every apartment automatically represents a good investment.

“There are currently no signs that apartment prices in Riga will decline in the near future, as they remain significantly below those in neighbouring capitals. As inflation continues to rise, investing in real estate can help preserve accumulated capital. Buying property is a smart decision, but investors must also be highly selective. A valuable investment is not simply any apartment offered at an attractive price. It must remain liquid over the long term, with strong demand driven by its location, construction quality, building condition and reasonable maintenance costs. Once these investor-friendly criteria are applied, the number of suitable properties becomes much more limited,” she said.

Market data show that transaction prices in Riga’s primary market for new developments remained stable in June compared with the previous month. Newly built apartments averaged EUR 3,500 per square metre in the city centre and EUR 2,730 in residential districts, while renovated pre-war buildings in central Riga slightly exceeded EUR 3,000 per square metre.

In the secondary market for new developments, average transaction prices reached EUR 2,870 per square metre in central Riga and EUR 2,330 in surrounding neighbourhoods. A total of 2,275 apartments in new developments were available for purchase, representing an approximately 8% increase in supply compared with May.

Meanwhile, the market for Soviet-era apartment blocks remained largely unchanged. Average prices stood at around EUR 1,170 per square metre in Riga’s residential districts and EUR 1,550 per square metre in the city centre.

*Source: Latio, based on Eurostat data, OECD Housing Taxation in OECD Countries (2022), and June 2026 Riga housing market statistics.