Will the end of housing bubble be good for Latvia?

A commenter on my previous post writes:

Am I the only one who thinks that a slowdown in the Riga housing market will be beneficial to the economy? I purchased a flat in Riga 2 years ago and had to wait for 3 months to find builders for a minor job... Flipping apartments for a living had become a desirable aspiration.

Surely the future of the Latvian economy lies in its ability to compete in the knowledge economy, for instance as a Baltic hub or as a EU springboard to Russia, not to channel a entire generation of young Latvians into quick-buck speculation!

I agree with that. Basing the economy on housing speculation funded by loans from Scandinavian banks is clearly unsustainable. Hopefully, when this is over, Latvia will have both more affordable housing and a healthier economy.