Analytics, Baltic, Financial Services, Loan, Real Estate

HAI for Tallinn and Vilnius has decreased due to a rapid increase in house prices, Swedbank reports.

In Riga, the HAI increased just a little in the third quarter of 2014, from 158 last year to 160 now. This means that an average household's income was 60% higher than needed to afford an apartment and allot no more than 30% of net wages for mortgage costs. The increase was in part due to higher net wages, which increased more than housing prices: average wage increased 8.7% year-on-year, whereas housing prices grew 6.5%.

In Tallinn, the HAI decreased from 154 to 142. This was due to a 14.6% increase in apartment prices. Net wages in Tallinn increased 3.9%.

The HAI for Vilnius is still the lowest among the Baltic capitals – 124 in the third quarter, primarily due to a 13.6% increase in apartment prices. Net wages in Vilnius increased 4.3%.

In the second quarter this year, the average period of time a Riga household needed to save enough money for the down payment decreased by two weeks and was 24.5 months. In Tallinn and Vilnius, it increase by about three months to, respectively, 30.2 and 36.4 months.