OREANDA-NEWS. May 29, 2009. Starting from April of this year, SEB banka's economist group has started summarizing a new analytical ratio – once a month, SEB group's economists will present the SEB Housing Price Indicator, reported the press-centre of SEB banka.

The SEB Housing Price Indicator is a ratio that shows the attitude of Latvian society in respect to changes in housing prices in the near future. The first SEB Housing Price Indicator, which was summarized in April, shows that the majority of Latvian residents are convinced that housing prices will continue to fall.

The majority of Latvian inhabitants expects that housing prices will continue to fall over the next year. The SEB Housing Price Indicator, which recognizes the difference between those persons who expect a rise in prices in the next year and those who think that the prices will fall, was -55.5 in April of 2009. This reveals the pessimism of people in respect to the potential stabilization of housing prices in the near future.

62 % of Latvian residents think that housing prices will fall within the next day. An increase in housing prices is supported by 6 % of residents, but 19 % of residents think that housing prices will remain at the same price level over the next year. The data of the SEB Housing Price Indicator evidences that the opinion regarding the issue on the development of housing prices is similar between men and women.

When evaluating the feeling among the representatives of Latvians and other nationalities, the data of the SEB Housing Price Indicator evidences that Latvians are forecasting a fall in housing prices more than the representatives of other nationalities – respectively 63 % and 60 %.

The greatest pessimists are inhabitants with higher education – only 4 % consider that prices might increase within a year's time, while 73 % of respondents of this group think that prices will continue to fall. But inhabitants with primary education are less critical – 48 % forecast a fall in prices, but 13 % think there will be a growth in prices.

The conviction that the prices of real estate could increase within a year's time, was most evident for people in the age group from 18 to 24 years of age, but the forecast on the decrease of prices was most mentioned by people from 35 to 44 years of age.

The greatest pessimists live in Riga and Zemgale. 69 % of Rigans expect a further decrease in real estate prices, but only 6 % of Riga's residents think that prices could increase during a year's time. In Zemgale, the forecasters of price growth and price fall were, respectively, 2 % and 65 %. The most optimistic in respect to housing prices are the residents of Vidzeme – 14 % of Vidzeme residents consider that prices could increase, but 42 % of Vidzeme residents expect a fall during the year.

The most pessimistic residents are those with higher incomes (4 % expect a price growth, 72% expect prices to fall), less pessimism is evident in the groups of inhabitants with lower incomes (7 % growth compared to 55 % fall).
 
Both those working in the public sector and those employed in the private sector are equally sure about the decrease of housing prices over the following year, but unemployed respondents are tend more to assume an increase in housing prices.
 
Technical Information on the Survey
The SEB Housing Price Indicator will be published regularly once in a month, which will provide the possibility to follow changes in public opinion regarding the prices of real estate. The survey is carried out in cooperation with the research centre SKDS. The survey was carried out from 14.04.2009 to 22.04.2009. Based on the stratified random selection method, 1 010 permanent Latvian residents aged from 18 to 74 years were surveyed in the entire territory of Latvia, by carrying out direct interviews at the places of respondents' residence. Selection was representative in respect to the general total.