July 28, 2022.
The information was prepared by Laura Jäger, Bigbank Marketing Manager.
Too high real estate prices are the main factor that discourages people from buying a new home. This is the opinion of a third of the respondents in the survey jointly conducted by the market research and public opinion research agency Norstat and the mortgage loan issuer Bigbank Latvija.
High real estate prices were named as the biggest obstacle by 34% of all respondents, or two thirds of those who are considering the idea of getting a new home in the near future. It is significant that this argument is the most relevant for those residents who need real estate the most. Namely, for young people. In the age group from 18 to 29 years, the price deters 46% of all respondents, and in the 30-39 age group – 43%. Considering that apartments in Riga are much more expensive than elsewhere in Latvia, the price affects the choice of residents of Riga more than those living outside the capital. In Riga, it is an obstacle to making a purchase for 39% of respondents, while in the rest of the country only three out of every 10.
A tenth of the respondents indicate that there is a lack of quality housing in the area they are interested in, so they had to abandon the idea of buying a new place of residence, at least temporarily. This problem is also more urgent for the residents of Riga, where 13% of the population lack good housing. On the other hand, in rural areas, it is an obstacle of only 4%, which could be explained by the more modest demands of the inhabitants, or the decision to build a house themselves.
No less significant obstacle is the availability of funding. It has caused 11% of all respondents to change their decision to buy property. 7% of them found the conditions offered by the bank to be unfavorable. The situation is clearly illustrated by the fact that unfavorable conditions are offered to residents of small towns. Among them, 10% complained about the bank’s unwillingness to be accommodating.
“We have heard all kinds of stories from our clients about how banks dissuade people from buying property or simply refuse financing because the house they viewed is too far from Riga or a big city. This essentially forces customers to move to more densely populated areas where real estate is often more expensive than in a smaller town or village. We are sure that our clients know where they want to live, so we are happy to help them make their dreams come true. Bigbank Latvija finances the purchase of real estate in any part of Latvia – in Riga, big cities, small towns, villages and countryside,” emphasizes Edgars Surgofts, head of Bigbank Latvija.
52% of all respondents are not currently considering the purchase of real estate, because they have already bought a home recently, or they are still satisfied with their current place of residence. Norstat Latvia surveyed 1035 Latvian residents.
Par Bigbank
Bigbank AS is an Estonian bank that specializes in issuing consumer and mortgage loans, granting loans to legal entities, as well as providing advantageous time deposit services. The company has expanded operations outside Estonia, establishing branches in Finland, Sweden, Latvia, Lithuania, Bulgaria, as well as offering cross-border services in Austria, Germany and the Netherlands. The company is managed by Martins Lants, a member of the board of the group. Mart Veskimagi, Argo Kiltsman, Ken Kanarik and Ingo Poder also serve on the board.
Additional information:
Laura Jaeger
Head of Bigbank Marketing
+371 29436568
www.bigbank.lv
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