Swedbank spokeswoman Vineta Savicka said that in the second quarter of this year the HAI in Riga has increased slightly in comparison with the first quarter of this year and the fourth quarter of 2014.
"For a second consecutive year, improvement of housing affordability has been thanks to the wage growth outpacing the apartment price growth. In the second quarter of this year, there has also been a slight decrease in interest rates on housing loans," said Savicka.
The HAI in Riga in the second quarter of 2015 was 152, from 142 a year ago. The value of 152 means that the income of a "standard" household is 52 percent higher than needed for a housing loan that costs no more than 30 percent of the family's income.
The index in Riga was pushed up by a 7.3 percent growth of wages, a decrease of interest rates by 16 basis points, while housing prices rose 2.2 percent.
The bank notified that lower interest rates have improved the HAI in Tallinn and Vilnius as well, to 151 in Tallinn, and 133 in Vilnius. The number of months needed to save for a down payment, which equals 15 percent of an apartment price, is 20.9 months in Tallin, 35.7 months in Vilnius, and 26.3 months in Rīga.
The HAI reflects household buying power, based on apartment sales that have been made, but says nothing about opportunities for apartment sales.
It includes mortgage costs but excludes taxes and subsidies, including property tax and interest deductions, as well as housing maintenance costs such as utility bills.