Latvian residents continue buying homes and build private homes despite the increase in both utility payments and different construction costs, the deficit of offers on the market and the war in Ukraine, all of which provokes instability, as reported by finance institution Altum.
«When making the decision to purchase or build a home, people react to the situation in Latvia and the rest of the world. For example, in the first months of 2020, when the Covid-19 pandemic broke out for the first time, demand suffered a sharp drop. It did recover a couple of months after the initial shock and by autumn we observed an increase of activity on the market,» says Altum private guarantees office manager Andris Veismanis.
In January 2022 housing guarantees were provided for the amount reaching EUR 2.69 million. This amount reached EUR 3.86 million in April, EUR 3.88 million in May and EUR 3.65 million in June.
«Both the price surge and the war in Ukraine creates uncertainty for the future. However, we no longer see the kind of decline we had observed at the start of 2020,» said Veismanis.
According to information from Altum, the average guarantee amount provided to families with children in 2022 is EUR 9.1 thousand. For young specialists this amount reaches EUR 9.8 thousand. Average bank loan amounts were EUR 92.1 thousand and EUR 84.6 thousand this year respectively.
State support is the most popular among residents in Riga and Pieriga, where guarantees have been provided to 85.7% of families with children and 85.2% of young specialists. Zemgale is second with 5.8% of families with children and 5.1% of young specialists.
Between 2015 and 2022 Altum provided a total of 27 657 housing guarantees worth nearly EUR 220 million.
Home purchase or construction guarantees are available for families that have children (under the age of 23 years), as well as families expecting a child. The amount must not exceed EUR 250 000. Guarantees are also available to young specialists (under 35 years of age) that have secondary professional or higher education. Guarantees are not to exceed 20% of the base amount of the housing loan or EUR 50 000. Guarantees for both groups are provided for a period of up to ten years, Altum reports.