18 Jul 2012 16:22

Latvian housing price view stable, down in Lithuania

Almost 70 per cent of respondents in an SEB survey among the general public in Latvia say they see rising or unchanged housing prices in the coming year. The corresponding figure in Lithuania was 60 per cent. The percentage forecasting rising prices remained stable in Latvia at 35 per cent compared to 34 per cent in the March survey. The share of optimist declined to 28 per cent from 39 per cent in March.

"Differences in the Latvian and Lithuanian housing price survey results could be explained both by the general mood of the population about the national economic situation and by household finances, as well as by the house price levels and changes,” Edmunds Rudzitis, household economist at SEB in Latvia, says.

He says the Latvian public remains more positive regarding improvement in the financial situation over the next year than in Lithuania. Latvian consumer sentiment is also less influenced by developments in the euro zone. Housing prices in Riga, the capital of Latvia, are on average lower than in Lithuania’s capital city Vilnius, although average household income in the two countries is similar.

“That could be one of the explanations of more people forecasting rising housing prices in Latvia," Rudzitis says.

The survey in Latvia was carried out in cooperation with the research center SKDS surveying 1,001 Latvian residents throughout the country in the age group of 18 to 74 years. In Lithuania the survey was carried out in cooperation with the company Baltijos tyrimai interviewing 1,007 Lithuanian residents aged between 18 and 74 years.