Predicting changes for housing prices in the next two to three years, 66% of interviewed Latvian residents said prices would likely increase, according to data from DNB Bank’s survey.
Every tenth respondent expects housing prices to decline. 18% of respondents are confident that prices will remain the same.
The highest proportion of respondents who expect prices to rise is in Riga (70%). The lowest is in Latgale – 58%. Price decline is predicted the most often in Latgale (16%). The lowest proportion of residents who expect prices to decline is in Kurzeme (5%). This region does have the highest proportion of residents who expect prices to remain the same – every fourth resident believes this.
“There is a reason for such differences – Latvia’s housing market is affected by opposing factors – declining and growing prices, which also differ between cities and regions,” explains DNB Bank’s board member and vice-president Anita Berzina. “Economic grow is the strongest positive factor. It is expected to speed up this year and the next. We expect wages and the number of new jobs to rise more rapidly. However, development will be concentrated in certain cities, where the number of residents is either stable or is expected to grow. Population continues to decline elsewhere. Because of that, prices there are starting to decline from the already low level to an even lower one,” she adds.
In relation to the growth of the real estate market in the next two to three years, every third Latvian resident is confident that people will use property rent services more often. 4% of respondents are of a different opinion. There are also different opinions in relation to the matter with the purchase and sale of housing – while every fourth respondent believe people will buy and sell more properties in the next two to three years, 24% of respondents predict the opposite. Nearly every fifth respondent is confident activity on the real estate market will remain unchanged. 13% of respondents say people will engage in construction more.
“Data from the Central Statistical Bureau of Latvia and Ober-Haus shows that apartment rent segment’s prices tend to decline slightly in Riga and other large cities in Latvia. This is because supply has increased. Demand for summer homes also increases. This could affect their prices and rent fees,” Berzina continues.
Looking at apartment rent in a regional perspective, differences surface in residents’ many opinions. 29% of Kurzeme’s residents expect people will buy and sell real estate property more often in the next two to three years. 30% of residents in Zemgale lean towards the opposite opinion. (BNN/Business World Magazine)
