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Wednesday 19.09.2018 | Name days: Verners, Muntis
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Survey: real estate purchase is the most optimal form of investment

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULatvia’s residents view real estate purchase as one of the best forms of investment. 46% of Latvia’s residents would invest in real estate. Other popular forms of investment include gold, which is considered reliable by 26% of residents, and life insurance – 18%, according to results of Swedbank’s survey.

In reality, however, residents more often pick savings account (31%), followed by savings made on 3rd level pension plan (28%), as well as accumulative life insurance (15%). Only 9% of residents have invested in real estate in the past year. It should be said that residents pick direct investment forms more rarely – 8% pick shares and investment funds, and 4% pick securities. Instead, residents more often pick existing solutions in which investment managers can perform risk assessment on behalf of residents, according to survey results.

«Following the improvement of the economic situation, gradual decline of unemployment and increase of income, the volume of financing available to residents has increased in recent years. Swedbank data shows that part of the income is usually diverted to form savings. Currently the level of residents’ savings has reached its historic peak. Low deposit interest rates have also affected savings and deposit habits, forcing residents to look for alternatives. We have noticed that many residents have keep their safety pillows on their bank or savings account. This makes money quickly accessible in the event of unexpected situations. The other group of residents are the ones who feel financially stable and look for ways to make more money than what savings or deposit account can offer. In such cases residents often pick pension funds or accumulative life insurance, which allows them to make more money when compared to a savings account or term deposit,» says Swedbank Insurance and Investment manager Kristaps Kopštāls.

A comparison of the funds residents have on their bank and deposit accounts shows that in 2010 the total volume amounted to EUR 4.1 billion or EUR 1,932 per capita, whereas at the end of 2017 it amounted to EUR 6.3 billion or EUR 3,251 per capita. Although monetary stimuli from European Central Bank have affected interest rates, pushing them to the lowest level in years, 49% of Latvia’s residents believe now is the time to start making savings and deposits.

So-called millennial generation (residents aged up to 30) seem the most positive about profitability of savings and deposit. However, representatives of this particular generation are also behind other resident groups when it comes to deposit plans (only 22% form savings). Savings currently are made the most often by residents aged 40 to 50 (47%). Data shows that the volume of money kept in the form of savings and deposits has grown considerably over the past five years:  by52% in different accounts, by 39% in the form of securities, 118% in the form of accumulative life insurance, and by 114% in the form of pension savings, as Swedbank comments the survey.

Safety of deposited funds along with good profitability is very important to Latvia’s residents. When picking the type of savings and deposit options, residents want to see simple and comprehensive terms (44%), services applicable to their needs (37%), and sufficiently convenient services (34%), according to Swedbank’s survey results.


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