Why Latvia’s Rental Market Will Reach Unprecedented Heights in the Future

At present, only 13% of people in Latvia live in rented dwellings, while 87% own their home. The European average is 30/70, and in Germany and Switzerland the share of renters is as high as 50%. Many believe that Latvia is a “home-ownership country,” where people will always own their property. But was it ever different in Switzerland? What causes this difference?

Housing price growth has far outpaced wage growth. The trend can’t change — construction costs will continue to rise faster than incomes. The legal environment between tenants and landlords is already well-established, which makes the market more stable and predictable.

There is a shift in thinking between generations — the older generation lived with the conviction “buy a house, leave it to your children,” while the younger generation thinks: “live today, be happy, free, uncommitted to things.” Here today — elsewhere tomorrow. This doesn’t mean constant moving, but rather freedom of choice, which increasingly is valued as true wealth.

Result: the rental market is becoming ever more attractive. And evidence of that is the fact that new players are entering Latvia, offering brand new homes for rent.