The Euribor interest rate – what is its impact on the housing market in Latvia as a whole – what will happen, what is happening, what happened, this is the question asked by the TV24 program “Price of Money” to experts in the field.
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As you know, the Euribor rate had already increased compared to the time before 2022. And everything is logical – if something is more expensive, less is bought. The impact of Euribor is, of course, downward. This is how Pēteris Strautiņš, the economist of Luminor bank, begins his explanation.
He points out that the Euribor has already decreased a little from the highest point that was in October of last year – a little for now, but the decline in the rate will definitely accelerate. “Financial markets are always trying to guess what the future rates will be. The current guess is that by the end of the year Euribor will have fallen to around 3%. Currently, it is slightly below 4%. This is already a benefit! I expect that the rate will continue to fall in the coming years.”
Does the fact that housing costs are expensive right now mean that people are choosing to rent more often?
“Yes, it is, but there is also no known number of so-called institutional tenants. Of course, many plan, many put something on paper, but if you have to build a rental house right now from scratch, then unfortunately you either have to be very, very, very long and cheap money,”
Aigars Šmits, Chairman of the Board of the Latvian Real Estate Transaction Association (LANĪDA), expresses this opinion.
Investors calculate in all kinds of ways and the only thing that turned out to be profitable was to buy one already built house, where they will invest in a complete renovation, and there will be some kind of profitability, says Schmidt about his experience.
“Funds are no longer free organizations, they manage borrowed money and must fulfill promises made to investors. Activity is currently very, very low in Riga as well, not to mention any regions at all,” says the expert.
The “Price of money” project is financed by the Media Support Fund from the funds of the Latvian state budget. AS “TV Latvija” is responsible for the content of the program “Money Price”.
Themes
Tags: Euribor affected housing market Latvia Elementary expensive bought
