Bigbank: Lithuania was the most active home loan market in the Baltics in the second quarter

While Estonia and Latvia saw mortgage loan agreements concluded in the second quarter remain at the same level compared to the previous quarter, the Lithuanian market was clearly the most active, with 26% more agreements concluded, according to Bigbank's comparison of mortgage portfolios in the Baltic countries.

Compared to the second quarter of the year before last, the number of mortgage loan agreements in Latvia has more than tripled, while in Estonia agreements were concluded nearly two times more and in Lithuania slightly more than two times more. "Latvia has indeed been in the role of a catch-up player for a long time, but in recent years the gap is narrowing. At the same time, in terms of all important volume indicators, Estonia and Lithuania's lead is still solid for now," comments Arthur Taavet, acting head of Bigbank Estonia.

Estonians continue to borrow the largest sums for home purchases, with their average loan agreement amount in the second quarter being 133,479 euros, followed by Lithuanians with 113,250 euros, and the Latvians' average loan amount was considerably smaller at 63,491 euros. "There is a clear connection here both to real estate prices and people's borrowing capacity, both of which are indeed growing in Latvia, but still remain below our neighbors," explains the head of Bigbank, who notes that the difference between the average loan amount in Estonia and Latvia has been approximately double for a long time, but looking at the growth trend of the average sum of new loan applications, those times are rather over or ending in the near future.

The number of new loan applications, which helps forecast further market activity, grew compared to the same period last year by 46% in Lithuania, 15% in Latvia, and 2% in Estonia. "As far as Estonia is concerned, we see that the market has emerged from the downturn of a few years ago and has reached a new level, which in the big picture has remained stable over the last six months," summarizes the portfolio's main indicators Arthur Taavet, who notes that the new higher VAT rate that came into effect in July did not bring any preventive purchase boom in apartment sales either.