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Artur Eresko → Realty: desires and possibilities

Artur Eresko → Realty: desires and possibilities

Just 10 percent of residents of Latvia plan to buy housing in the coming two years. Notably, the farther from Riga the lesser housing ambitions of the population. So, if in the capital almost 20 percent of population contemplate improvement of accommodation, then in a rural district just 4 percent dream of such spending purchase.


 

For the sake of fairness it is worth noting that this is not only and not so much about poverty or greed of villagers in comparison with city people. A villager (farmer) by nature is more conservative and to the last clings to a house, where his ancestors used to live. Another matter is an easygoing urban drifter...

Nevertheless, nobody questions a higher level of income in a city as well. And therefore the opportunity for the first contribution and to obtain a housing loan in Riga is considerably higher than in rural areas.

However, both cautious villagers and risky city people do not hurry to banks for mortgage. As at the middle of this year the volume of housing loans issued in Latvia made up 4.43 billion euro. This is 3.6 percent lower than in the middle of 2015. Thus, new loans are being issued less actively than the old ones are being repaid and written off.

The crediting enhancement is adversely affected by the attempts to introduce the left key principle as a binding condition, where as a result, the banks had to change the financing policy and demand for housing loans has fallen dramatically. Once the left key principle was introduced as a non-binding condition, also upon introduction of the state programme of support of families with children, the demand for housing loans has stabilized. And nevertheless, it (demand) is yet far from positive dynamics.

Large-scale crisis in the realty market of 2008-2011 forced Latvian population evaluate their possibilities more carefully. 1 – room flat in hands is better than apartments in mortgage.

However, the elaborated by the crisis the basic instinct of caution does not prevent tenants of small-sized apartments to dream of own homes.

How does an ideal housing in Latvian style look like? The survey showed that the majority of population of Latvia dream to acquire a recently built private house of at least 100 sq. meters with 3 to 5 rooms. Ideally such house should be located close to the nature, moreover, have a porch, balcony and garage.

Alas, the possibilities and desires of Latvian population still coincide less often than the residents would like. The gap between the realty bought in Latvia and the dreamed one seems unsurpassable. One can only raise the toast from an old film:

- I have a desire to buy a house, but have not possibility. I have a possibility to buy a goat, but have no desire. Let us drink to our desires always meeting our possibilities!

 

Artur Eresko (Артур Ересько), candidate of Economic and Legal Sciences.

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