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A fifth of respondents believe that the market is more likely to stagnate while the same percentage goes in the opposite direction and believes that the market is growing very quickly and overheating. A fifth (17%) believe that the real estate market is growing steadily and at a reasonable pace. In general, according to the population, the real estate market is currently characterized by price increases in certain segments (29%) and by an insufficient quality offer in the regions (27%). At the same time, people's desire to buy their own homes is increasing every year, and over the next two years, 15% of the economically active population is reflecting on this idea.
When badessing the perceptions of the inhabitants on the development of the real estate market, Swedbank Normunds Ducis, head of the mortgage sector, said: "Over the last ten years, the real estate market in Latvia has developed steadily, without excess, and it would be premature to talk about overheating the The average price of apartments in Riga, although rising, is currently between 25% and 30% below the pre-crisis peak of an average of 1027 euros per square meter. the activity is less important than at that time and people are more cautious about the possibility of buying and borrowing for housing. Significantly, the greatest caution is currently observed in Latvia, where the real estate market is growing slower than in Lithuania and Estonia.In comparison, in Vilnius, the average price per square meter reached 1,488 euros this year, against 1746 in Tallinn, but five years ago, the average price of in both countries was 1,100 euros per square meter. Rising prices in neighboring countries have been facilitated by the relatively strong demand for new housing. At the same time, real estate in Latvia is the most affordable of all Baltic countries, as wage growth in us exceeds that of real estate prices. "
What factors influence people's intentions to buy or not to buy housing?
This year, citizens' confidence in their finances has increased dramatically, as has the sense of real estate prices and more affordable credits. More than half of residents who plan to buy a home during the next two waiting periods indicate that housing prices are currently available (56%, an increase of 8% over the previous year). 39, last year) and have a constant confidence in the future (53%, up 11%). compared to last year). In addition, one third is in favor of wage growth (32%, increase of 24%), a sufficient provision for the first payment (32%) and low interest rates (28%, up 8%).
Although housing prices have become more accessible to citizens over the past year, they still remain high and are the main reason for the delay in the purchase of a home. At present, 63% of the population postpones the decision to buy a house because it thinks that real estate prices are high. Part of the obstacle is the lack of a first payment (27%), but the proportion of these residents has significantly decreased during the year (by 18%). However, dissatisfaction with the offer also increased: it did not meet buyers' expectations (26% of respondents, an increase of 8%).
Significantly, this year the number of people delaying the purchase of a property in the hope of a fall in prices in the near future has almost quadrupled (such forecasts represent 15% of the population), but according to Normunds Ducis, such a scenario should not be invoked. "Nowadays, borrowers are much more responsible and shopping more thoughtful.Therefore, the standard price of an apartment exceeding 2,000 euros per square meter is no longer possible.At the same time, the market Latvian real estate is "becoming alive"; In addition, construction prices are rising, which sets the minimum possible price per square meter in which real estate developers have the opportunity to sell homes. "
If citizens had the opportunity to choose where and for what property to buy, 36% would buy a private house in one of Latvia's regions, while 26% would buy a private house in Riga or Pieriga.
How is the housing market, household finances and the health of the Latvian economy in 2008? Said Swedbank The economist Linda Vildava: "If we compare the economy of Latvia this year and ten years ago, we can say that it now rests on more durable" legs ". construction has been very rapid over the last two years, its contribution to the economy has increased from around 9% a decade ago to 5% last year, for example in 2007 investments in all types of Buildings stood at about 3.5 billion euros, but last year they were only 2.3 billion, about a third less. of work is less dependent on the evolution of construction.If in 2008, 12% of all workers or 124 000 were working in construction, the construction industry employs this year about 73 000 people, or about 8% of employees.The importance of the construction sector in the Latvian economy has diminished Given the current situation of the Latvian economy, it would be exaggerated to talk about the repetition of history, and economic shocks could rather be external rather than internal risks. "
Demand for new housing only exists due to lack of available housing affordable in the segment. Mareks Klavins, chairman of the Bonavera real estate development council, explains the situation: "We are seeing that the purchasing power of the population is increasing, but that the market is lacking in quality: only one-tenth of the Latvian population lives in housing built during the years of independence.Most housing, or 75% of housing, was built during the Soviet era.The people of Riga need new housing, the housing stock needs to be restored – Old homes do not stay younger, so we see good potential for future growth in the real estate market by providing housing for new projects accessible to a wide range of people. "
Swedbank The population survey was conducted last November in cooperation with snapshots, interviewed more than 700 inhabitants aged 18 to 64 on the whole of Latvia.
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