Despite high inflation, expected public utilities price surge and continued growth of real estate prices, half of Latvia’s residents believe purchasing housing is a better idea than renting. 23% of residents would rather rent, according to results of a survey by Citadele Bank.
Results of the survey indicate that 50% of Latvian residents consider it more practical to purchase housing rather than rent it, considering the current economic situation.
19% of these residents mentioned that loan payments may turn out smaller than rent pay. This is one of the main arguments. Another 18% justify purchase over rent with the possibility of selling real estate property if such a need appears. 13% mentioned security factor – tenants cannot present demands for repairs, pets or come up with other rules.
Residents aged between 25-44 years who earn at least EUR 1 150 a month in Kurzeme and Pieriga lean more towards purchasing housing rather than renting.
The option of renting an apartment or private home is attractive for 23% of respondents, 8% of which explain it with potential financial instability and the lack of interest in taking on lasting financial commitments.
Most often the decision in favour or renting housing is voiced by Riga’s residents (18-24 years) whose monthly income is below EUR 720.
Survey data indicates that approximately every tenth resident in Latvia would neither rent nor purchase housing. Instead residents would rather look for a different solution, such as moving in with a relative.
«Currently market players are in an interesting situation – because of inflation the volume of free funds and purchasing power of Latvia’s residents is down. On top of that, the Russian invasion of Ukraine has caused real estate prices to surge,» says Citadele Private Finances Office manager Jānis Mūrnieks.
According to the expert, these factors should, theoretically, reduce the interest for housing. However, in parallel to that rent prices have increased, which is often one of the main factors residents look at when considering purchase or rent of real estate property.
Mūrnieks said the ongoing energy crisis and the rise of prices of public utilities will should promote residents’ plans to purchase housing in new projects.
Citadele and SKDS agency carried out a survey in August 2022, interviewing 1 005 Latvian residents.