Nearly half of the respondents in Lithuania (46 per cent) and more than half (53 per cent) in Latvia said they believe housing prices will rise over the coming 12 months. Only 12 per cent and 7 per cent respectively in the two countries see prices falling, with the remainder being neutral.
SEB’s Housing Price Indicator is calculated as the difference between the share of positive and negative respondents, producing an indicator value of 34 in Lithuania and 46 in Latvia.
Julita Varanauskienė, a household economist at SEB in Lithuania, says expectations regarding the future are generally improving while unemployment is decreasing and the expected income level is higher or at least more stable than before. All factors help drive expectations on housing prices higher too.
A year ago, in December 2012, the share of respondents in Lithuania and Latvia who believed that housing prices would rise were 27 per cent and 39 per cent respectively. The share of who expected a price drop was 22 per cent in Lithuania and 13 per cent in Latvia.
For the survey, market research companies Baltijos Tyrimai in Lithuania and SKDS in Latvia carried out around 1,000 interviews in each country during December.