The housing affordability index (HAI) increased to 184.8 in Riga and 131.7 in Vilnius, but decreased to 156.3 in Tallinn.
In Tallinn, the HAI fell by 3.1 points in the second quarter of 2018, compared with the same period in 2017, as apartment price growth outweighed wage growth and interest rates increased. In Riga, the HAI increased by 6.9 points as strong wage growth offset an increase in apartment prices and a slight inch-up in interest rates. In Vilnius, the HAI improved by 2.3 points as fast wage growth compensated for apartment price growth and rising mortgage interest rates. The time needed to save for a down payment did not change in Tallinn, and decreased by a month in Riga and by around two months in Vilnius; it was 27.5, 23.1, and 34.3 months, respectively.
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.