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At the same time, 9% of Latvians expect housing prices to drop in the next 12 months, and 30% think that prices will remain unchanged, while 4% of respondents were undecided.

SEB Banka said that people's expectations had been influenced by further growth of income and improved availability of loans.

The Housing Price Indicator reflecting the difference between the number of respondents expecting price growth and those expecting price reduction is generally higher this year than last year – around 40 points in the second half of 2016 as compared to 25-36 points in 2015. However, the indicator decreased to 38.3 points in September 2016, losing two points from 40.3% in June 2016.

The growth of the indicator is largely due to increased expectations of housing price increase among Rigans. The number of residents of the Latvian capital expecting a rise in housing prices has been growing for two consecutive quarters. At present 54% of Rigans think that housing prices will go up in the next 12 months, the same percentage as in Kurzeme province in Latvia's west. People in other Latvian regions are less optimistic about housing price growth.

Expectations of housing price increase are the highest among respondents aged 35-44 years, respondents in managerial jobs and residents of Riga and Kurzeme but the lowest among respondents aged 55-74 years, jobless and pensioners. Still, even in the latter groups the number of those expecting a rise in housing prices is larger than the number of those, who think that housing prices will go down.

The number of respondents, who said they planned to buy or start building own home in the next 12 months, has increased slightly in the past quarter.

SKDS pollster ran the survey for SEB Banka in September this year, interviewing 1,002 permanent residents of Latvia aged 18-74 years across the country.