Bank Manager: Home Loans for Baltic Residents Keep Growing, Estonians Far Ahead of Neighbors

This year in the second quarter, the average amount of home loans issued increased in all three Baltic countries, with Estonians' average of 140,120 euros still remaining by far the largest, although the gap with neighbors has narrowed, according to Bigbank's comparison of home loan portfolios in the Baltic countries.

In Estonia, the average loan amount of concluded home loan agreements in the first quarter was 140,120 euros, which is twice as large as Latvians' 69,044 euros and 45% larger than Lithuanians' 96,577 euros. "The differences are still significant, but the latest trend suggests they are narrowing. In Latvia and Lithuania, the average home loan amount increased by 15% in the second quarter and in Estonia by nearly 7%," comments Arthur Taavet, head of Bigbank Estonia, and adds that the number of new home loan agreements increased the most in Lithuania.

According to the head of Bigbank, it is above all worth monitoring what changes occur in the Lithuanian market in the coming autumn. "As a result of the pension reform that came into force in early April, up to three billion euros should find their way to Lithuanian bank accounts this autumn. It can be assumed that spending this money will boost trade in Lithuania and accelerate inflation, but understandably, the real estate market should also gain momentum and home loan borrowing should increase," explains Arthur Taavet on the most important events in the market.

According to the bank's head, the dynamics of the Estonian and Latvian markets are rather similar, although the nearly twofold difference in loan amounts has persisted for a longer time. "In Riga, both real estate prices in general and the prices of new apartments comparable to Tallinn's have so far been nearly a third cheaper, which is why the loans taken to buy a home in Latvia's capital remain smaller," explains Taavet, the main difference between the two markets.