Bigbank: Latvia Has Caught Up Significantly in the Baltics Housing Loan Market, But Amounts Are Still Considerably Smaller

In the third quarter, Latvia issued more than twice as many home loans as in the same period two years ago, but the average loan amount there of 63 thousand euros falls short by half compared to Estonia's 126 thousand, according to Bigbank's comparison of Baltic countries' home loan portfolios.

In the third quarter of this year, new home loan volumes in all three Baltic countries were practically the same as in the previous quarter across all indicators. "This kind of stability is rather positive and shows that the third quarter's two summer months, July and August, were transaction-rich," comments Arthur Taavet, acting head of Bigbank Estonia.

The number of new home loan contracts concluded has become more uniform across the three Baltic countries in recent years, and the clear financial difference comes precisely from Latvians' smaller loan amounts. "Since experts estimate that acquiring a comparable new home in Riga is still up to 30% cheaper, there is also clear logic for why home buyers in Latvia can manage with smaller loans," explains Bigbank's head, emphasizing that in terms of both the number of loan applications and concluded contracts, the Latvian market has seen a very significant increase over the past two years. In Lithuania, the average home loan amount is 108 thousand euros, which falls between Estonia's 126 thousand and Latvia's 63 thousand.

According to Bigbank's head, the number of loan applications in the third quarter was higher in Estonia, Latvia, and Lithuania than in the second quarter and also higher than in the same period a year ago, which gives reason to expect that the final quarter of the year will also be active in the home loan market. "The growth in the number of applications also shows that people have learned to compare different banks' offerings when taking out home loans, and this is a very good sign of quietly growing general financial literacy," adds Arthur Taavet, emphasizing that Bigbank takes into account all of the applicant's official permanent income sources when issuing loans, including child benefits.