Prices in Vilnius increased by 9% year-on-year to reach EUR 1,356 per square meter in late June. Prices in Tallinn grew by 4% to EUR 1,515, while prices in Riga went down by 2% to 925 euros per sq. meter, the bank said in a press release on Tuesday.
"Although property prices in Vilnius grew at the fastest pace, we are far from a market overheating that we saw in 2008, when prices in Vilnius jumped over the EUR 1,600 mark," Jurate Gumuliauskiene, head of the Private Clients Division at Swedbank, said.
"Prices in neighboring Riga remain lower due to several reasons. First of all, prices (in the Latvian capital) plunged by more than 60% during the crisis years, the sharpest decline in the Baltic countries. Amendments to the immigration law, which were put in place several years ago to increase the amount that a foreigner must invest in real estate to obtain a residence permit, are also having an impact on property prices," she said.
The number of residential property transactions in Riga jumped by 24% over the year, signaling a recovery in the market. By comparison, Vilnius posted 14% growth in the housing transactions market and Tallinn recorded 2% growth.
Tallinn is in the lead in terms of the number of transactions per 1,000 inhabitants, at twenty, followed by Vilnius with 18 and Riga with fourteen.
69% of residential property deals concluded in Latvia in the first half of 2016 were financed with borrowed money, compared with 56% in Estonia and 38% in Lithuania.
