The housing affordability index (HAI) increased to 148.6 in Tallinn, 177.2 in Riga, and 124.8 in Vilnius.
- In Tallinn, affordability increased by 2.9 point in the third quarter of 2017 compared with the same period in 2016, as apartment price growth moderated to a greater extent than wage growth.
- In Riga, the HAI rose by 4.7 points, as robust wage growth and a continuous decrease in interest rates offset rapid apartment price growth.
- In Vilnius, the HAI improved marginally by 0.5 points as very rapid wage growth outweighed apartment price growth and an increase in interest rates.
- The time needed to save for a down payment decreased by around three weeks in Tallinn and Vilnius to 29.0 and 37.2 months, respectively, while increased in Riga by two weeks to 24.1 months.
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.
