Bank Chief: Home Loan Market Revived in All Baltic States, Estonians Powerfully in the Lead
In the second quarter of this year, the Baltic mortgage market has become significantly more active again, and the boldest borrowers are Estonians, whose average new loan contract amount was over 143 thousand euros, which is more than twice higher compared to Latvians and approximately 40% higher compared to Lithuanians, according to Bigbank's comparison of Baltic mortgage portfolios.
According to Jonna Pechter, Bigbank's Estonia Director, all indicators of the mortgage market have grown significantly compared to a year ago. The number of contracts made the biggest jump in Latvia in the second quarter, where approximately three times, or 194% more contracts were concluded than in the same period a year earlier, in Estonia this figure was more than twice, or 129%, and in Lithuania slightly less than twice, or 85% higher.
"People's purchasing confidence and borrowing capacity are becoming stronger, and acquiring a new home that was put on hold in the meantime is again significantly more on the agenda," commented Jonna Pechter and added that in comparing the first and second quarters of this year, all indicators related to new mortgage loans are showing clear growth.
Compared to a year earlier, loan amounts grew by approximately one-third in both Estonia (35%) and Latvia (29%), while in Lithuania the growth remained more modest at 8%. When buying a new home, Estonians make the boldest investments, whose average loan amount of 143 thousand euros is even more than twice higher than the corresponding figure for Latvians, which is 67 thousand euros. "Understandably, this is also related to the general situation in the real estate market. For example, in Riga, older and cheaper secondary market apartments have clearly dominated the market for many years, while in Tallinn quite a large amount of new developments have been completed," explains Pechter, referring to the fact that growing interest in brand new homes is likely also increasing the average loan amount.
