Mortage loans to stay in robust

  • 2005-10-12
  • Baltic News Service
RIGA - The rate of mortgage lending in Latvia is not expected to slow down in the near future and will reach the average EU ratio of mortgage loans against GDP in two years, Parex Asset Management president Roberts Idelsons predicts.

At a conference last week, Idelsons said that there was no risk of the market overheating in Latvia before reaching the EU average.

Raimo Smukais, a representative of Nord/LB Latvia bank, predicted that mortgage crediting would continue to increase rapidly, as currently the average dwelling space in Latvia is 22 square meters per capita, while the average figure in the EU is 40 square meters or more.

"The [crediting] boom will go on, as there is no reason for mortgage crediting to slow down," he said.

He added that banks were competing for future clients - students and schoolchildren. In the future, they are also expected to pay more attention to small businesses, which until now were left outside their focus of interest.

In the first eight months of this year, the total value of mortgage loans issued by Latvian banks rose 61.7 percent to 2.3 billion lats (3.2 billion euros) at the end of August.