Housing prices are indeed shrinking - but only on one end

Eurostat data show that in the 3rd quarter of 2015 housing prices in Latvia fell 7.6% compared to the same period in 2014, which is a record among EU member states. However, economists and market players say the figure can paint a misleading picture, reported Latvian Radio 4's Domskaya Ploschad' Wednesday.

The head of the Latio real estate company Edgars Šins was perplexed about the Eurostat data.

"I don't understand how Eurostat makes its conclusions. Not long ago we were the fastest-growing [market] in the EU, but now it appears that we're falling faster than everyone else. Real estate segments are very different. It's true that the housing market is going through rough times. There are fewer buyers, but there are fewer of them in the luxury segment," he said, adding that the accessible market part is seeing a revival.

Edmunds Rudzītis, an economist at SEB, also said that Eurostat data don't paint the full picture.

"They take the segment that's meant for non-residents, look at luxury apartments and houses, which non-residents were buying before. Now they aren't buying anything at all. On the average it seems housing is getting less expensive. But it isn't," he said.

He said that the housing market hasn't undergone substantial changes except for price drops in the luxury segment - prices for regular flats have not changed and have only slightly decreased for new housing projects.

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