In fact Riga is now the most affordable of the three Baltic capitals, according to the index with Riga scoring 171, Tallinn 159 and Vilnius 128.
The housing affordability index (HAI) is calculated for a family whose income is equal to 1.5 of average net wages with an average-sized apartment of 55 square meters. The HAI is 100 when households use 30% of their net wages for mortgage costs. When the HAI is at least 100, households can afford their housing, according to the established norm. The higher the number, the greater the affordability.
"In Riga, the HAI increased by 19.0 points, mainly due to a 6.9% drop in apartment prices," Swedbank said based on second quarter figures.
"The time needed to save for a down payment decreased by 1 month and 2 weeks in Tallinn, to 27.6 months, and by 2 months and 3 weeks in Riga, to 23.6 months; it increased by 1 month and 1 week, to 37.0 in Vilnius," Swedbank said.
"Apartment price growth in Tallinn remained modest due to adequate supply, which has been increasing since last year. Price growth accelerated significantly in Vilnius, at least partly due to strong demand. The price fall accelerated in Riga, owing to a stronger decline in the price of the city center apartments, mainly due, in turn, to cheaper projects being available."
Back in 2007, Riga was the least affordable of the three capitals according to the HAI data.
