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Baltics 'in the doldrums'?
New figures have revealed that house prices in the Baltics are on the slide...
The fortunes of the Baltic countries appear to have turned around. Riga, the capital of Latvia, which only 6 months ago headed up the Knight Frank Global House Price Index with a year on year growth rate of just under 40%, is now one of the worst performers in the index.
Prices in the capital fell by 7.1% over the course of the year. Uncertainty over employment prospects, high levels of household indebtedness, and rises in interest rates to combat inflation have all contributed to ending the property market boom seen over recent years.
Mortgage interest rates increased substantially during 2007: the interest rate on a one year fixed rate mortgage deal had risen from 6.2% in January to 14.3% in December.
Estonia is equally in the doldrums, with a 14.5% fall in prices over the course of the year. Lithuania has fared slightly better, and the rate of growth remains positive, albeit barely, at 0.9%.
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