SEB’s Housing Price Indicator for Latvia indicates further stabilisation of the population’s expectations. Since May 2009, the indicator has risen sharply but the indicator remains in negative territory at -8.2.
The share of respondents in the latest survey commissioned by SEB in Latvia predicting rising prices for housing reached 20 per cent. In the previous month 16 per cent predicted rising prices, while in summer 2009 only five per cent did so.
Edmunds Rudzītis, Household Economist at SEB Latvia, says that respondents who predict increasing prices or are neutral now form more than half of Latvia's population.
“Thus, most of Latvians believe that the housing market already reached its lowest point and that, within the next year, prices will not decrease further,” Rudzītis says.
He adds that optimism could continue rising, but warns that plans regarding the increase of the property tax rate could put a halt to this tendency and lower optimism again.
In the survey, 28 per cent of respondents said they believe price will fall in the next twelve months. This compares to 27 per cent last month and 62 per cent in May 2009.
The indicator shows the difference between the share of respondents who believe in rising prices compared to the share who believe prices will fall.
Dace Kriķe