Nearly half of Latvians believe property prices likely to rise

The number of Latvians expecting property prices to rise in the next 12 months has increased during the past quarter by seven percentage points to 49 percent, a new survey showed.

According to the latest Housing Price Indicator, drawn up by SEB Bank in Latvia, the number of Latvians predicting a drop in housing prices decreased by two percentage points over the quarter, from 11 percent to 9 percent.

Meanwhile, 25 percent of respondents in the survey did not expect housing prices to change anytime soon.

Also, 17 percent of respondents could not make any predictions as to how housing prices might change in the nearest future.

"Residents' expectations about housing price growth have become more optimistic -- the value of the Housing Price Indicator has hit the highest point in two years. People's mood has been improved thanks to income growth and stronger purchasing power," said Edmunds Rudzitis, a household economist at SEB Bank.

The economist noted that banks' lending policy had also become more favorable, while the government has been taking measures to continue its support program that helps families with children receive mortgage loans.

In the capital Riga, the number of respondents expecting a rise in property prices has grown from 43 percent three months ago to 51 percent in the latest survey.