OREANDA-NEWS. June 25, 2013. Housing affordability index calculated by SEB banks in Lithuania, Latvia and Estonia shows that in 1Q 2013 possibilities to acquire residential property among the population in Vilnius and Riga improved, and in Tallinn – decreased.

This year, a resident of Vilnius would be able to buy residential property that is by 4.7 sq.m. larger as compared to 2012, in Riga – 3,6 sq.m. larger than in 2012, whereas the area of residential property that can be afforded by a resident of Tallinn decreased by 0.3 sq.m.

However, as before, a resident of Vilnius with an average level of income can afford the smallest area residential property as compared to counterparts in Riga and in Tallinn. Residents of the capital city of Latvia with average income level can afford 47,1 sq.m. standard residential property in old-construction residential areas, in Estonia – 50,2 sq.m., whereas in Vilnius this area is 39.6 sq.m.
 
Triin Messimas, Household Expert at SEB Estonia: "In Riga and Vilnius the lowering of interest rates has a positive influence to affordability; also the real income is growing faster thanks to growing net-salaries and low inflation".

She added that last year growth in property prices influences property affordability in Tallinn, which is neither compensated by low interest rates or salary growth.

SEB's housing affordability index shows the size of residential property that is affordable for a resident with average income level obtaining a bank loan at current terms. The indicator is calculated taking into account the population's income as well as prices of consumer goods and services.