Housing accessibility in Latvia remains behind other Baltic States

Housing accessibility has increased more in Riga than in Tallinn and Vilnius over the course of the past year. Such are the results of the latest SEB Housing Accessibility Index. Nevertheless, new housing options remain less accessible to residents of Riga than the people living in Vilnius and Tallinn.

In 2015, the value for new projects had increased the most in Riga – by 3.3 m2 to 27.9 m2, according to data from the SEB Housing Accessibility Index. In Vilnius, the value of the index has increased by only 0.4 m2 to 29.6 m2. In Tallinn, it has decreased by 0.9 m2 to 35.7 m2.

«Prices of new apartments in Riga’s micro-districts have decreased over the course of 2015. This can be explained with a decline of demand on apartments following the increase of the threshold necessary to be provided by residence permit to EUR 250,000. People are less interested in buying apartments in exchange for residence permits. This resulted in a change in the structure of deals – the proportion of transactions in the economy-class housing sector continues to increase. The reduction of the index in Tallinn was because of the fact that housing prices had gone up rapidly over the course of the past year,» – explains SEB Bank’s expert on social economy Edmunds Rudzitis.

Nevertheless, in spite of the decline of the index, new housing offers in Tallinn remain more accessible in comparison to Riga and Vilnius. If income of residents continues growing more rapidly than real estate prices, housing in Baltic States will keep becoming more accessible. This is also because interest rates for loans will remain at a historically low level in the next two countries, adds Rudzitis.

According to data from the SEB Housing Accessibility Index, offers in serial projects became more accessible to residents of Riga in Q4 2015 – the value of the index had increased by 1.4 m2 to 53.5 m2. This was mostly due to the positive effect caused by the growth of income of residents. In Tallinn, the index grew by 0.5 m2 to 44 m2 and in Vilnius – by 0.7 m2 to 41.9 m2.

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