In the business environment is not always possible to observe a long-term and stable development, it applies both to economic growth and real estate market development. Market participants would be able to make decisions efficiently in the field of real estate and construction, if the economic and real estate market development cycles, their characteristics, causes and consequences are analyzed. Thus, the economic theory theses become apparent and once again those prove that the real estate market is not able to regulate itself efficiently, therefore the policies implemented by the government and guidelines concerning economic regulation are of particular importance. The historical development of the Latvian real estate market has been significantly influenced by the accession of Latvia to the European Union, which has contributed to the interaction of Latvian financial sector and real estate market, as well as resulted in better residents’ views on real estate. Thus, since 2004, when Latvia joined the European Union, many foreign real estate enterprises have entered the Latvian real estate market, the number of real estate objects purchased in Latvia by non-residents has increased. A price level of real estate in Latvia is formed to a great extent in the context of the price level in other EU member states.