49.2% of Latvian residents expect real estate prices to go up in the next 12 months. This is slightly less when compared to results of a survey conducted last autumn, as reported by SEB Bank representatives with reference to SEB Housing Price Indicator.
13.4% expect housing prices to go down.
25.8% of Latvian residents do no expect real estate prices to change in the near future. This is slightly less when compared to last autumn.
11.5% of respondents had no opinion about the possible changes of real estate prices in the near future.
The highest share of people who expect real estate prices to go up still remains in Zemgale – 73%, which is not only the highest percentage compared to other regions, but also an increase of 10 percentage points since the autumn survey.
Latgale is next with 58% of residents who expect real estate prices to go up, Kurzeme – 46.5%, and Vidzeme – 44.7%.
Only 43.1% of respondents in Riga expect prices to go up.
The majority of the people who expect real estate prices to go down are in Vidzeme and Riga region – approximately 16.5%.
The value of SEB’s House Price Indicator – the difference between the number of predictors of house price rises and price falls – is slightly lower this spring than last autumn and accounts for 38.2 points.
Analysis of respondents’ responses in different socio-economic groups shows that the highest expectations of real estate price rises are among population aged 25–34 years – about 55%, as well as aged 18–24–54%. Similarly, students (65.5%), housewives (57.5%) and entrepreneurs (56.2%) are similarly inclined.
The least among those who expect real estate to become more expensive is among higher- and middle-level managers (36.8%).
Income-wise, the majority of the people who expect prices to up are among low and medium-size wage recipients – 59% and 53%. Among high and medium-high income earners, there are also those who expect the value of real estate to drop by 28% and 31%, respectively.
The fact that the expectations for the real estate market have slightly settled down is understandable, says SEB Bank economist Dainis Gašpuitis. The passed period was rather challenging for many households and the first signs of economic recovery were rather unconvincing at the beginning of the year. There was low activity on the market.
On the other hand, economists admit that while avoiding major shocks, the overall expectation of further price increases has remained quite high, including compared to changes in neighbouring countries. Nevertheless, Gašpuitis says the high level of expectations of prices going up indicates the return of rapid activity to the market. The optimism of the index is raised by groups whose involvement in the market is unlikely, they rather reflect the perception of the rapid increase in total cost.
“That is, respondents who are more optimistic than the average are with primary education, low income and live in the countryside. On the other hand, residents of Riga, middle or higher-level managers with high incomes have a much lower rating. It follows that the real estate market will continue to move positively, but not rapidly, and price recovery will be slow,” explains Gašpuitis.
The survey was conducted in March 2024 in cooperation with the SKDS research centre. 1 004 permanent residents of Latvia aged 18-75 were interviewed by the stratified random sampling method throughout Latvia, conducting face-to-face interviews at the respondents’ places of residence.
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