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Delphi Analysts interviewed calculated how much Lithuanian property prices are currently too high, they assessed what threshold is dangerous and whether we will reach it. Experts have identified measures that would help cool down the hot housing market.
The market is heating up, but overheating is not visible
According to the Bank of Lithuania (LB), house prices are currently 7% higher. exceed prices, which should be in current macroeconomic conditions. Earlier this year, that number topped 10 percent.
Algirdas Prapiestis, Head of the Macroprudential Analysis Division of the Bank of Lithuania, notes that the Bank of Lithuania uses three different methods to calculate fundamental, ie sustainable, house prices.
“One of the relative indicators, the relationship between house prices and nominal wages, shows that housing affordability is still relatively good, so house prices are not yet overvalued and may continue to grow.
However, other methods used indicate an overestimation of house prices of a certain size, and all the measurement methods show that house prices are currently around 7%. exceed prices that should be in current macroeconomic conditions, “he explains.
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