Stimulate GDP growth are higher wages and the growth of the real estate market is the fact that local buyers put their busiest of "good use" and purchase the property. To help and encourage residents to hunger properties Latvia sophisticated mortgage market recently developed and this allows more consumers to be able to afford to buy their own homes.
Moving forward the Government's commitment is focused entirely on increasing wages and standards of living as stated above, and to this end they have introduced tax incentives for people to invest in Latvia, they have four free trade zones across the country offer extensive international business and tax incentives they promote the emerging financial sector of the country in depth.
For a real estate investor just taking the above facts into consideration seems to be no great potential for both capital appreciation from properties or renovation of real estate flipping, especially in the Latvian cities of Riga, Ventspils, Liepaja and Rezekne where free trade zones and high employment rates, and buy to let market and around these cities. The slowdown in the global economy, which has recently resulted in the growth of negative real estate market Germany and Hungary can not be so far away and the borders of Latvia. Economists are increasingly concerned that apparently focus solely spirit of the Latvian government to raise wages and living standards attract them away from the mandatory requirement attention creating an environment for foreign direct investment supported. By forcing up wages inflation is spiraling and Latvia loses the competitive advantage it had on the countries of Western Europe in terms of its labor available for example. Inflation concerns also caused Latvia to still slide back the distance line being allowed to adopt the euro as its currency and attracted negative attention because its emerging financial sector was accused of "facilitating illegal activities ".
In 2006, wage growth exceeding productivity began in Latvia and this divergent trend is actually a negative factor for the long-term sustainable growth - Government Latvia but are apparently willing to accept that or accept that the expansion of rapid inflation could harm the market and cause overheating. It is likely that there will be short-term gains to Latvia before economic adjustment on the real estate market, which could take effect in the fourth quarter of 2007. But if you look at real estate as Latvian long-term investment products, so that the overall outlook for the property in Latvia are good because they depend on local labor, and although there are good prospects employment in Latvia and the Latvian government remains committed to sustainable increase foreign direct investment and to build a strong economy is a real estate market with room for capital appreciation and rental income in Latvia.
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