Agricultural land market in Latvia State Land Service of the Republic of Latvia Real Estate Valuation Board Rita Petersone Inese Zarina Julia Lebedinska General information Total area ~ 64,600 km2 Population ~ 2,3 million Capital Riga GDP (2004 year) 7,298 million EUR 1 2 Land division by purpose of use (land bilance on 01.01.2005) Formation of real estate market in Latvia 45,0% Forest 38,2% 1,8% Bush 4,1%2,1%1,4%3,6% 3,8% Swamp Other land Under water Agricultural land Yard Road Year 1991 Land reform As a result Formation of real estate property (objects of real estate market) 3 4 1
Development of real estate market in rural areas Characteristics of the first period 5 Development can be divided into 3 periods : First period (early 90s) Formation of real estate market Second period (late 90s) Slow development and stagnation of real estate market Third period (after year 2000) Activization and rapid development of real estate market 6 Beginning of real estate market formation Prices are occasional, non-stable (lack of information) Real estate has been sold rural areas in the first period Characteristics of the second period Lack of government subsidy for agriculture Agricultural productions are not cost effective Agricultural production prices are not competitive (if compare with import production prices) As a result: Agricultural lands are not marketable ---> Agricultural land prices are low Information about real estate prices is available Following properties are prevailing in real estate market: Properties with forest land Building plots Agricultural land for transformation into building plots Real estate market is active: In regions with nice landscape 7 8 2
rural areas in the second period Latvia is intending to enter EU Growth of the economy Possibility to obtain land as property (first of all for building purposes) Beginning of development of agriculture (non-traditional agriculture is prevailing) Beginning of development of rural tourism but agricultural land prices are low Building plots prices are growing Characteristics of the third period Agricultural land is demanded and sold Development of real estate market is going on with: Building plots Plots for recreation Real estate market is active: In regions suitable for agriculture (fertile land, good topography e.t.c.) In regions with nice landscape 9 10 rural areas in the third period Average building plot prices Real estate market participant range is broadening EU funds are available Latvian legislation had been adjusted (for agricultural land effective use) Agricultural land had been demanded ---> growth of agricultural land price Building plot price continues to grow 11 12 3
Agricultural land price dynamics Average agricultural land price by year Average agricultural land prices in 2004 by district 400 350 300 250 price (EUR/ha) 200 150 100 50 0 1998 1999 2000 2001 2002 2003 2004 year 13 14 Average agricultural land prices in 2003 and 2004 Conclusion 600 500 400 Region 300 200 100 0 North East Central West (Vidzeme) (Latgale) part (Kurzeme) (Zemgale) 2003 year 2004 year ACTIVITY RESULT Price (EUR/ha) 15 16 4
Activity: Support from EU Support from the state Economics development in rural areas Real estate market development and prices growth in rural areas THANK YOU FOR YOUR ATTENTION!!! mail to: Rita.Petersone@vzd.gov.lv Inese.Zarina@vzd.gov.lv Julija.Lebedinska@vzd.gov.lv 17 18 5