In the first quarter, the number of mortgage loans issued by Swedbank grew by 48% / day

The average loan amount increased by 19% to 91,000 euros in the first quarter. Tom explained this with the choice of clients in favor of more expensive and wider apartments.

Of the mortgage loans issued, 58% have been issued in Riga and 18% in Pieriga, Tom said. At the same time, she admitted that there is still demand in the regions and lending. The loans have been issued in all regions of Latvia.

In the regions, loans were most often issued for the construction of new homes, as these borrowers are mostly people who have been working for remote work who have decided to settle in one of the counties, Tom said.

She added that, according to Swedbank, 43% of the population plans to buy, build or renovate their home in the next five years. Most focus their plans around Riga and Pieriga.

Tom informed that half of the population, or 49%, has a budget of up to 50,000 euros, which means a serial apartment. Between EUR 50,000 and EUR 100,000, 26%could be allocated to the home purchase.

Swedbank’s chief economist in Latvia Liva Zorgenfreija predicted that the Latvian economy is slow but growing this year. Zorgenfrey said the first quarter signals were not bad, such as construction increased by 9%, the service sector activity has been higher, exports of services increased by 12%, and improvement has begun in manufacturing. Only consumption still does not improve.

At the same time, Zorgenfria admitted that there are still many risks, so gross domestic product (GDP) growth forecasts were reduced to 1.5% and 2.5% in 2026. Inflation is higher than expected, close to 4%. It is influenced by various excise changes and food prices. Prices for service are also rising rapidly. This year, 3.1% inflation is predicted, most likely even faster.

Zorgenfrey also predicted that the European Central Bank (ECB) would continue to reduce interest rates to this year’s end, when the deposit could reach 1.5%overnight. The reduction of this rate will also be followed by the reduction of EURIBOR rates.

Improvement of the purchasing power of the population has contributed to the improvement of mood since 2022, Zorgenfrey said. True, at the beginning of this year, the mood decreased slightly, possibly under the influence of inflation and geopolitical events.

Housing availability in the Baltics is enhanced by falling interest rates and rapid wages, Zorgenfrey explained. The availability of housing has improved in all three Baltic capitals and in Riga is still the highest, as the cheapest serial apartments dominate the market.

The average mortgage loan issued by Swedbank in Riga has been almost unchanged in recent years, Zorgenfrey said. Meanwhile, in Tallinn and Vilnius, this amount has continued to grow in recent years.