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Bank: residents’ optimism about housing price rise confidently increases

Compared with the beginning of the year, the proportion of residents who expect real estate prices to increase in next year has increased significantly.

SEB Housing Price Index value (the different between the number of people who expect housing prices to rise and those who expect prices to decline) has reached 46 points, which is the highest index since the beginning of 2014. Residents’ predictions in regards to housing price rise were affected by growing income and availability of loans.
 

«In September, 52.5% of interviewed residents said they expect housing prices to rise in the next 12 years. This means an increase of five percentage point when compared with a year ago. The number of residents who predicted housing prices to decline in the next year declined sharply – 6.2% currently. 23% of residents do not expect prices to change in the next 12 months. 18.5% of respondents had no clear opinion on the matter of housing prices,» the bank explains.
 

Compared with the previous year, SEB Housing Price Index has grown. In October 2016, the index was 38.3 points, whereas the current value is 46.
 

Survey data shows that the highest proportion of people who expect housing prices to rise is found in Vidzeme – 64.5%. Kurzme’s residents are also rather optimistic when it comes to housing price changes – 55.6% of residents there expect prices to rise.
 

«At the same time, those two regions also have the smallest number of people who expect prices to decline – 1.8% and 2.2%. The proportion of people who expect prices to decline is the lowest in Zemgale (40.1%). In Latgale, 51% of residents expect real estate prices to grow. It should be added, however, that the number of more optimistic people has increased in all regions,» experts explain.
 

SEB Bank economist Dainis Gašpuitis says that analysis of responses among different socio-economic groups shows that the majority of people who expect real estate prices to increase are found in the 18-34 age group, people in managing posts and self-employed people.
 

«People with higher education and average income are some of the most optimistic residents. The smallest number of people who expect housing prices to grow is found in the 64-74 age group. Nevertheless, the people who expect prices to grow generally exceeds that of people who do not,» the economist notes.
 

He also notes that residents’ predictions when it comes to housing price rise in the near future was largely affected by income growth and improved availability of loans.

BNN

29-10-2017
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