Riga house prices highest in Baltics, shows report

The housing affordability index in Riga reached 158.4 points in the third quarter of 2013, the highest figure among all Baltic capitals, according to the latest Baltic Housing Affordability Index by Swedbank.

In January-September 2013, housing affordability in Riga was the highest since 2005, when the index was introduced. Housing affordability in Riga improved the most for Soviet-era apartments in Riga's suburbs. Housing affordability in new apartment buildings in Riga's suburbs was considerably lower.

Housing affordability has also improved in Vilnius, reaching 130.6 points in the third quarter of 2013. However, housing affordability in Vilnius was still significantly lower than in the other Baltic capitals, mainly due to the fact that Vilnius residents have to dedicate a higher proportion of income towards buying a home.

In Tallinn, where housing affordability is usually the highest, it fell to 153.9 points in the third quarter of 2013. This happened due to apartment prices in Tallinn growing steeper than the average salary. Interest rates, however, remained stable.