- According to Ober-haus real estate company, the prices of apartments in Riga dropped 1.5% in June. The prices are still 5% higher than at the beginning of 2007. This is similar to the reports by the other major real estate company, Latio, which I quoted in my previous posts. Ober-haus also notes that the number of apartments for sale has decreased, as some disappointed sellers rent their apartments out instead. As a result, the number of apartments for rent has increased by 20%.
- Starting from last Tuesday, people seeking a credit of more than 12,000 lats (17,000 euros ) are legally required to provide their bank with a letter from State Revenue Service that tells the income on which they have paid taxes. The government has done this to decrease excessive lending, particularly to people who hide part of their income from tax service. In the first week, the revenue service has issued 3,800 such letters. Hmm, this sounds significantly more than the number of credits issued by Latvian banks in a typical week... I infer that people were ready for the new law. We'll have to wait for a while to see the effects of the new law and how much it actually decreases the lending.
- Parex Banka, one of main Latvian banks, is doing quarterly surveys of Latvian businessmen about the current state of Latvian economy and their expectations for the future (on a 0-100 scale). They report that Latvian businesses are becoming more pessimistic about the future, for the second quarter in a row.
- Meanwhile, some parts of Latvian economy are still booming. New car sales in June increased 38.6% compared to year ago. To compare Latvia with Western Europe, the new car sales per million people in Latvia have now reached 39% of German level. This is more than I would expect, given the quite big income gap between the countries. (And a very big change from 10 years ago, when most cars were imported to Latvia were used cars and hardly anyone was driving a new one.)
Thursday, July 19, 2007
Latvian real estate/economy update
This is a summary of main economy/finance stories from Latvian language news sources: