News for the undecided, now is a great time to buy a home – if you wait for the virus to drop in price, you won’t get

To buy or not to buy?

While more and more people are deciding to buy a home, there are buyers who are still waiting and are not sure if this time is the best time for such a long-term commitment. Saulius Vagonis, Head of the Ober-Haus Market Research and Valuation Department, who participated in the discussion of the Housing Fair organized by the Lithuanian Real Estate Development Association, emphasized that buyers currently fear uncertainty about the future and are considering whether the price of the property will change. According to the real estate expert, the main advice for those who feel overwhelmed by doubts is not to try to predict the future and evaluate the current financial situation.

“You don’t have to guess the future, but you don’t have to panic and make quick decisions. I myself have seen some transactions during the quarantine, in March, April, when people were scared and sold properties much more than they would sell today. . Only people were afraid that their property would depreciate and they would rush to sell. On the other hand, it is not necessary to wait and predict what will happen in the future. Crises are crises because they come unexpectedly “, emphasized S. Vagonis.

However, according to the participant in the discussion, we should not wear pink glasses and think that we have returned to the economic level of the end of last year, the beginning of this year forever.

“I would not say that this crisis is over, although Lithuania’s indicators are among the best in Europe and even the whole world, in other countries, as well as in large and influential countries, the crisis is still there. A bad situation can also come to us, so we cannot say that the world has overcome the economic and health challenges. The apocalypse has not arrived, but there is still no victory ”, warns the expert.

He goes on to say that given the general economic situation around the world and an objective assessment of your financial capabilities, you may consider buying a home. However, one should not “jump over the navel”: the home should be chosen according to financial possibilities. This is especially true during this period. You should also assess what type of home (house, flat, cabin) the buyer will need in the long term.

“The most important thing is to understand your long-term needs, you need to understand that you will be living in the purchased home not only this year, but also next, after five years. It means planning your period and choosing what you will need in both the short and long term. And buy it. Because if you choose a house that you like, but wait until the virus lowers the prices, you will not get it. In the same way, there may not be and where there is a lot of rush, because in the next six months the housing will be 15-20 percent. it will definitely not be expensive ”, emphasized S. Vagonis.

Tomas Sovijus Kvainickas, head of investment and analysis at Inreal Group, who also participated in the discussion, added that buyers choosing between an apartment and a house should appreciate not only the price differences between the two purchases, but also the responsibilities that acquire.

“One thing, a house can be more expensive than an apartment, you also need financial opportunities. Another thing, the house needs to be maintained alone, there is no manager, the house has additional obligations. A home may be necessary, but it must be dealt with with sobriety: if we have lived in quarantine for two months, it does not mean that that life lasts several decades. When a person buys a house, it is unlikely that they will not change it after a year, so a decision should not be made in the mood of a few weeks or months. We have to think ahead and weigh the long-term solution, “advises the real estate analyst.

The price is determined by three parameters.

Real estate experts agree that one of the reasons buyers wait and don’t buy a home is the hope that the price of real estate will change. In the discussion, S. Vagonis listed the parameters that must be evaluated when considering changes in the price of real estate.

“There are basically three parameters that determine real estate prices. Especially in the Vilnius property market. These are people’s salaries, population change, financing conditions. If you set those parameters, you can see the future. Looking at the months of April and May, we see that little by little the realization that wages in the labor market will not change dramatically, although there are sectors affected, the population of Vilnius is not decreasing, financing conditions are also favorable, because banks don’t seem conservative. In my head, this was where the biggest risk was that banks would decide to wait until the end of the quarantine and not fund the transactions. These are all parameters that are good. They allow us to hope that the property market, at least in Vilnius, will not experience terrible shocks, ”says the real estate expert.

Recalling the beginning of the quarantine, T. Kvainickas moved to 2019, when the real estate market was in the “golden age”, and to the beginning of 2020, when experts predicted record home sales. But then the housing market was hit, the world stopped.

“We spoke earlier in the year that the year could break even more records than 2019 as sales increased. And on March 16. a quarantine is announced that blocks any action. Not even the notaries worked, they did not provide services, it was simply impossible to record the transaction. The market stops because nobody knows what to do now. This does not mean that someone immediately lost their job or income, they simply couldn’t make a purchase, ”the real estate analyst recalled.

He went on to say that in April and May the opportunity to buy and sell had returned, but there was uncertainty in the primary market: “The results of apartment sales in July and August already show a recovery, although there are no sales as before the quarantine. . In July, the level of funding returned to normal. “

On the other hand, according to T. Kvainickas, buyers who could not buy a house in March due to technical obstacles could have achieved a good result, hesitated in April and May and finally decided in July.

“The market is not a matter of the day, in a few months we will see what real results we really have,” emphasized the real estate analyst.

The transaction was lost immediately

Real estate broker Resolution also shared his experience of working in quarantine in the discussion.
Darius Ringaitis. For him, the start of the quarantine was extremely unsuccessful.

“As soon as the quarantine was announced, some people immediately refused to buy, I lost the deal immediately, then I had a new facility, but I prohibited inspections and meetings, and then I communicated a lot with customers without leaving home, investigating your reaction, Expectations. I would do statistics to know what to do next, ”said D. Ringaitis.

He also alluded to a new trend that emerged during and after the quarantine: the desire of residents to invest in real estate by the sea.

“Living in a resort, you could name, was a rational decision, because people realized that this year they would probably not go anywhere and if they were willing to invest money in a small apartment in Vilnius, which they rented, they realized that the investment in the beach this year is more attractive. Especially since he himself will have a place to stay during the holidays. He bought those holiday apartments in droves, “emphasized the interlocutor in the discussion.