In short
- Market value comes from real deals for similar flats.
- Find 5-10 similar deals in the same building or neighbourhood over the last 12 months.
- Compare price per m² and adjust for floor, condition, building and layout.
- The result is a range; for a mortgage the bank needs a certified valuer's report.
What a flat's market value is
Market value is the amount an informed buyer and seller would agree on when neither is in a hurry. It is different from the asking price, which the seller picks, and from the cadastral value (kadastrālā vērtība), which the state uses for tax.
The only solid basis is deals: what other people recently paid for similar flats. Listings show what sellers want, deals show what buyers pay. The gap between the two is bigger than most people expect, and it has its own article: asking price vs sale price.
The method in five steps
This is the same logic valuers use, only simpler.
- Collect the facts about the flat. Address, area from the cadastre, number of rooms, floor, building series or year built, condition.
- Find similar deals. First in the same building, then in buildings of the same series nearby. Use the last 12 months; if there are few, widen to 24.
- Convert to price per m². That lets you compare flats of different sizes. Keep in mind that small flats usually cost more per m².
- Adjust for differences. Ground or top floor, renovated or not, balcony, renovated building. Each adjustment is usually a few percent.
- Build a range. Take the average of the adjusted prices per m² and multiply by the area. The low and high ends matter as much as the middle.
Example: a two-room flat in a Soviet-era series building
Say you have a 52 m² flat in a 602 series building, 4th floor, with an old renovation. Over the last year six similar flats sold in the same building and the two next to it.
First work out the median price per m² of those six deals. Then adjust it down for the old renovation; no floor adjustment is needed, as the 4th floor is a middle floor. Multiply the adjusted price per m² by 52 m² and build a range around that amount: that is your flat's market value.
How to check your estimate
Compare your result with an independent estimate. m²cena calculates one from deals in the same building and neighbourhood, taking into account series, floor, area and the flat's condition. If your estimate and ours differ significantly, go back and review the deals you used.
Common mistakes
- Comparing with listings instead of deals
- Using deals from another neighbourhood or building type
- Ignoring that the listed area differs from the cadastre
- Using old deals when the market has moved since
- Adding the full cost of a renovation: buyers pay less than it cost
When you need a certified valuer
Your own estimate is good for deciding whether to buy and how much to negotiate. For a mortgage the bank orders a certified valuer's report, and you also need one for inheritance, divorce or disputes.
If you are valuing your own flat before selling, start with What Is My Flat Worth.
Common questions
How can I find out my flat's market value for free?
Find similar deals in the same building or neighbourhood and compare price per m². m²cena shows an estimate by address.
Is the cadastral value the market value?
No. The cadastral value is the state's figure for tax, and it is often lower than deal prices.
How much does a certified valuation cost?
It depends on the valuer, the property and how fast you need it, so compare quotes from several certified valuers before ordering.
How often does market value change?
It moves with the market. Deals older than a year may need adjusting for price changes.
Sources
- Kadastra informācijas sistēma · Valsts zemes dienests
- Mājokļu cenu indekss (PCI050c) · Centrālā statistikas pārvalde
- Latvijas Īpašumu vērtētāju asociācija · LĪVA
This article is for information only and is not legal, financial or tax advice. It may contain mistakes or be out of date, so check it against official sources or with a specialist before you decide. m²cena accepts no liability for any loss or damage arising from the use of the information in this article.