The Republic of Latvia is a Baltic state in Northern Europe and borders Estonia, Lithuania, Russia and Belarus.

What's so special about it?

Known as one of the most beautiful capital cities in Europe, the historic centre of Riga was declared a UNESCO World Heritage Site and its extensive Art Nouveau architecture is comparable in importance only with Vienna and Saint Petersburg.

Since it gained independence from the USSR in 1991 Latvia has strived to integrate itself into the free market and by 2004 had joined both NATO and the EU. Its economy has been one of the best performing in Europe and figures for mid-2007 show GDP growth was 11.3%. As a consequence Latvia has also had some of the highest house price rises in Europe. At the end of 2006, Latvia along with the other Baltic States, was seen as one of the best bets and Knight Frank ranked it second on its list with projected growth of 17.5% and in the first quarter of this year prices had risen by 62%.

Best kept secrets Latvia hopes to adopt the euro in the coming years but the main stumbling block is inflation, which is currently at 9.5%, the highest in Europe. The Baltic Times reported that Ilmars Rimsevics, chairman of the Bank of Latvia, was forced to admit that the economy is overheating, though he added that the situation is not critical. For local Latvians this has resulted in prices of bread and meat growing by 26% and 15% respectively and the Bank of Latvia also announced that the current account deficit reached over 2bn in June, growing by 80% since January.

Who lives here?

Famous Latvians include ballet dancer Mikhail Baryshnikov, philosopher Isaiah Berlin and Juris Upatnieks, inventor of the hologram.

What's the property market like?

As the star player on the European property stage Latvia has recently seen signs of hard times ahead. In 2005 new apartments in parts of Riga grew drastically, while in 2007 prices in the Greater Riga area have actually begun to fall and in June prices dropped by 3.5%. The number of transactions has also declined as buyers take a cautious approach.

Global Property Guide however reports that the price of building land is still rising and rents continue to rise for good quality properties.

Recently Danske Bank declared that there were signs the boom in the Baltics was coming to and end. Lars Christensen, an analyst at the Bank said there were three reasons for this . . . prices had risen too fast, a rise in interest rates and a tightening of lending criteria for consumers. However agents at Ober-Haus, the largest real estate agency in the Baltics, said that this was not a bust but a correction after a period of rapid growth.

How do you go about buying property?

When searching for a Latvian property The Baltic Times is the best source for business information in English. Local agents can be found through the Latvian Real Estate Association or in Ireland through the AIPP or FOPDAC. Foreigners can buy property in Latvia but to buy land they need the permission of the local municipality. Once a property has been found a reservation fee is paid and then a deposit. It is advisable to get local legal advice as there is no cooling off period.

A 10% deposit is paid and a notary organises the signing of the contract. This can be done in the Latvian Embassy if you cannot travel to Latvia. The property is then registered in the Land Book, title transferred and the deal completed. It generally takes less than two months. Mortgage loans can be got for as low as 1.8% and up to 95% of the property but criteria is getting tighter.

Where are the best places to buy?

Riga is the main location to buy as it is the capital and accounts for half the economy.

The best districts are Kipsala, Old Riga and Jurmala. The suburbs are cheaper and the town of Saliena, 5kms from Riga, is being planned for development. The highest demand is for 50 to 100sq m apartments.

What's the rental market like?

According to agents Ober-Haus, small one and two-room apartments in the Riga districts of Elizabetes, P Brieza, Eksporta and Hanzas Streets are most in demand.

The Old Town is considered too noisy by many. The Global Property Guide reports that in Riga yields are about 4.77% - 5.43% and rent on a 50sq m apartment is about 600 a month.

What's the resell market like?

The Savills Global Residential Market Review 2007 found that Latvia has the lowest owner occupancy rate in Central and Eastern Europe. However at present loans are getting harder to get and inflation is rising, therefore many locals may not be able to buy a home, which could affect the local resale market.

Average property prices?

In Riga smaller apartments, ranging from 50 to 100sq m cost on average 150,000 to 290,000 respectively.

What are the tax breaks with Ireland?

Overall costs are low but tax is due on rental income; property tax is 1.5%; you don't have to pay capital gains if you hold onto the property for more than a year and VAT of 18% is only due on new builds. Ireland has a double taxation agreement with Latvia.

FAST FACTS

Getting there: Aer Lingus flies direct to Riga
Area: 64,589 sqkm
Population: 2,291,000
Currency: Latvia Lati (1.00 LVL = 1.42)
Weather: Temperatures range from -10degreesC to 21degreesC.
Transport: Latvia has three major airports with many low fares airlines flying in and there are rail links to the major cites in the region. Riga is also a busy port on the Baltic. Riga has one of the highest rates of car theft in the world and also only ever use red coloured official taxis.
Going out: Riga is very much a stag weekend haven, with plenty of entertainment of all sorts - day and night. The Skyline Bar has views from the 26th floor and Exclusive is the newest nightclub on the block and stays open past 7am. The infamous black Balsam shot is a taste worth trying and the Radisson SAS is the best hotel to get away from the noise of the city.
Eating Out: Latvian food is typically northern European in that there is a lot of rye, peas, beets and potatoes used with meat being a necessary addition. Those who like spices may find the food somewhat bland, but maizeszupe is a sweet Latvian soup made from rye bread. There are plenty of restaurants in the Old Town of Riga.
Shopping: Amber is in vast supply here so there are many shops selling it. Street markets are held in Riga in Sadovnikova each weekend and the main stores around the train station.

USEFUL CONTACTS

Irish Embassy in Latvia: 00371-6703 9370; irijas. vestnieciba@gmail. com
Embassy of the Republic of Latvia in Dublin: 01662 1610; embassy. ireland@mfa. gov. lv
The Baltic Times: www. baltictimes. com
Latvian Real Estate Association: 00371-1733 2034; www. lanida. lv Ober-Haus: www. ober-haus. lv
The Global Property Guide: www. globalpropertyguide. com
Association of International Property Professionals: www. aipp. org. uk
Federation of Overseas Property Developers, Agents and Consultants: www. fopdac. com OverseasCafe: www. overseascafe. com
MyOverseasProperty: www. myoverseasproperty. ie
National Statistics Agency: www. csb. lv
Official Latvia Tourism Portal: www. latviatourism. lv
Guide to Riga: www. riga. com / www. virtualriga. com
The Economist (Latvia): www. economist. com/countries/latvia/