Survey: 71% of Latvians expect housing prices to rise
A Luminor bank survey shows 71% of Latvian residents expect housing prices to rise soon, nearly 20 percentage points more than two years ago. Homes in Latvia remain cheaper than in Lithuania and Estonia.
The share of Latvian residents who expect housing prices to rise in the near future has grown by almost 20 percentage points over the past two years, according to the latest survey by Luminor bank. Currently 71% of respondents forecast higher prices, while only 6% expect them to fall. Prices keep climbing in Latvia, yet demand shows no sign of weakening.
Price expectations
The younger generation is the most likely to expect increases: 79% of those aged 18 to 29 think so. In Riga, 77% of residents share this view. Just under a tenth of respondents believe prices will stay the same, and 14% are unsure.
Kaspars Sausais, a representative of the bank, says the market is driven by wage growth, a wider supply of new homes and favourable lending conditions. He sees no preconditions for a price decline at present and says prices could rise by 5–10% this year. In Estonia, 78% of residents expect increases; in Lithuania, 79%.
Comparison with neighbours
Latvia still has the lowest housing prices in the Baltic states. This year prices in the new-build segment have risen by about 5% compared with last year. The average price of new homes exceeds 2,500 euros per square metre, and in the most sought-after parts of Riga, such as the centre and Āgenskalns, it can reach 3,000–4,000 euros.
In Vilnius, the average price in new developments is about 4,080 euros per square metre, and about 3,400 euros on the resale market. In Tallinn, new-build apartments average about 4,700 euros per square metre, and about 3,000 euros on the resale market.
Market activity
Luminor data show that financing issued for home purchases in the first six months of this year was 13% higher than in the same period last year. Buyers are weighing not only price but also quality, energy efficiency, location and running costs. Standard-series apartments account for nearly a third of the bank's financed home deals, while new developments made up 29% in the first half. Interest is also growing in homes in the Riga suburbs and in private houses.
