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Wednesday 20.09.2017 | Name days: Marianna, Ginters, Guntra
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Latvian residents borrow EUR 50,000 on average to buy housing

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUAlthough the mood of Latvian economically active residents is mostly in favour of buying housing, not rent, every fifth respondent that plans to procure real estate property in the near future said one of the main obstacles for that is insufficient money for the first instalment.

In this regard, ALTUM’s realized programme for support of families with children has brought valuable results since its launch. Following an increase in interest and demand for this programme, experts are considering continuing this programme, notes Swedbank.

Compared to the housing financing situation of 2005, the current state of affairs is that housing accessibility has improved, which is thanks to some of the lowest property prices and gradually growing monthly wages in the country. Ten years ago a two-bedroom apartment in Purvciems cost EUR 48,000, now it costs EUR 40,000. Current average bank loan interest rates are very similar to those twenty years ago. Although housing accessibility increases, rent prices are also on a rise. Ten years ago, rent of the kind of aforementioned apartment in Purvciems would cost an average of EUR 250 (EUR 300 this year). With that, compared with the situation ten years ago, the current situation leans more toward buying a home and doing in rationally, the bank explains.

The average size of the first instalment in Latvia ranges from EUR 5,000 to EUR 10,000. Usually it takes residents two years to save up money to afford it. With ALTUM support, the time it takes residents to save up money for the first instalment reduces to an average of nine months.

With the need for owning real estate property unchanged, gradually growing income and relatively low prices and interest rates, it is expected that the financing market will experience stable growth in 2016. At the same time, the market will be ruled by well-planned and rational choice of housing and loans, the bank predicts.

Ref: 102.109.109.4798


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