In a city where seaside villas and boxy Soviet-era buildings are the norm, this unusually shaped house, built in 2005, is uncommon.

The roof is shaped like the five interlocking rings that symbolise the Olympics, complete w­ith the symbol’s bright colours. Inside, there is no predictable vertical climb from the first floor to the second. Instead, small sta­ircases of three or four steps lead from room to room, and the ou­ter walls follow the hexagonal shape of the building. In total there are 300 sqm (about 3,200 sq ft at 10.76 to the sqm) of living space.

The sloped ceiling in the living room angles down to a wood-burning fireplace, and hardwood floors pick up the light from a hexagonal skylight. The master suite has a whirlpool bath, and there is an extra room that could be used as an office or a nursery. The basement is equipped with a laundry room; there is also a ro­om with a tanning bed, which is included in the purchase price. Outside, a flower garden borders the lawn; the garage, which holds one car, is attached.

The house is in the Dzintari section of Jurmala, a quiet residential neighbourhood five minutes from the Baltic Sea. The heart of the city is about 20 minutes’ walk. Riga, the capital, is a 25-minute drive, but with traffic it can take up to 40 minutes.

Market overview

From 2000 to 2007, the Latvian economy experienced a boom largely “driven by residential real estate,” said Christian Keller, an economist for Barclays Capital in London. He said Scandinavian banks, which own the majority of Latvia’s banking system, provided easily accessible financing for buyers in Latvia, and in turn drove up prices.

But in 2007 the bubble burst. Aigars Smits, chairman of the board of Arco Real Estate in Riga, said prices had dropped up to 60 per cent over the past two years.

In 2009, according to Keller, the Latvian economy came close to collapse. The gross domestic product contracted by 18 per cent that year, he said. It took an infusion of cash from the International Monetary Fund, the European Union and aid pa­ckages from several Scan­din­av­ian governments to bring it back from the brink.

The market bottomed out in September, said Barbara Nestor, an economist for Commerzbank in London, and prices have begun to recover. Now, new apartments in Riga’s city centre and Old Town area sell for €1,300 to €3,500 per sqm ($149 to $400 per sq foot, at $1.23 to the euro). Newly built apartments in other parts of Riga cost €800 to 1,100 per sqm, while older Soviet-era apartments cost much less, roughly €500 per sqm.

This house’s unusual architecture, large lot and prime location make it more expensive, roughly €2,475 per sqm.

Smites noted that the figures being tracked by the government may not reflect actual sale prices because some buyers misrepresent purchase price to avoid paying higher transfer taxes.

Who buys

Most of the buyers of newer villas with sea views are foreigners, said Odessa Bogodistaja, head of the residential department for Arco Real Estate. East Euro­peans are the most common foreign buyers, especially Russians. Latvians, less likely to be able to afford such properties, tend to buy apartments in Soviet-era buildings. “Latvian customers are more rare,” Bo­godistaja said.

Smits said Jurmala is a popular second-home destination for Muscovites, because of its accessibility. Riga is a 40-minute flight from Moscow.

Buying basics

Foreigners can own property in Latvia outright, but “you have to ask permission from the local municipality,” Smits said. There is no fee for the required permit.

Closing costs are relatively low, compared with those in other parts of Europe. Smits says notary fees are usually under $200. When property changes hands, the buyer pays a 2 per cent transfer tax to the state.

Financing has become scarce in Latvia since the credit crash. Smits says that in some cases it may be possible to get a small amount of financing — for 40 to 50 per cent of the purchase price, for example — but that, in general, foreign buyers should expect to pay cash. Most of the houses in Latvia are priced in euros, although a few are priced in lats, he said.

Taxes & fees

Property taxes are based on the cadastral value, which Smits says is determined by the state in an annual assessment, and is typically much lower than market value. Property taxes come to 1.5 per cent of the cadastral value of each property. This year the taxes on the property featured here are 460 lats (about $800), according to the listing agent.

— International Herald Tribune