Almost half of all Latvian residents (43%) believe that now is the time for purchasing a home, if there is such a necessity. House prices are attractive and there is no significant price drop in sight. While 14% of respondents believe, that prices have already reached the lowest point.
The ones who are sure about the situation on the housing market – those with high monthly income – 29% believe now to be the best time for purchasing a home and also claim that prices have reached an all-time low with only a 9% fall in the future. Residents with monthly income up to 400 LVL think similarly – 40% support the idea of purchasing a home for the current prices, if the necessity and ability arises, Swedbank questionnaire data shows.
«The general mood of the public is gradually becoming more positive. Right now, we do not see any indications that the number of people, who feel stable enough to realize their remaining purchases, would be increasing. The practice of taking reasonable loans, keeping in mind one’s financial abilities will dominate the coming years. It will be guaranteed by both the situation on the housing market – a stable supply and relatively unchanging housing prices -, and the experience of previous years», – Swedbank‘s Head of Private Financing Dzintars Kalinis says.
According to Swedbank and the State Land Service data, prices for standard apartments in Riga micro districts has stabilized over the last year – the average m2 price was 590 EUR (415 LVL) in March, compared to 606 EUR (426 LVL) a year ago. During the first quarter of 2012, the average price was by 12% higher than the lowest point of September 2009 – 526 EUR (370 LVL).
Swedbank data shows that 47% of all last year’s deals were related to the purchase of standard apartments. 31% of all issued credits were intended for the purchase of private homes, 14% – for apartments in new project buildings and 8% for apartments in pre-war buildings.
The current housing market tendencies show that, even though, bank daughter company owned property gradually enters the market, there is still a notable deficit of quality offers; in addition, constructions of several new projects began this year and had no significant impact on the overall supply. Some part of the current offer is made up of buildings constructed in 2006 – 2008 with incomplete or partial finish. Private housing construction became active – the number of construction permits grew by 12% in 2011, while the largest proportion of deals are still being made in model projects.