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Experts who participated in a discussion organized by the Bank of Lithuania this week said that due to low interest rates, money is increasingly losing its saving function, which is why people are investing in real estate markets and financial
“Today, both in Europe and especially in Lithuania, we are seeing a transformation. A large part of the people will not be able to buy real estate after a decade,” said Marius Dubnikovas, vice president of the Lithuanian Business Confederation.
“It just came to our attention then. This means that we will see generations in Lithuania who, like Austria or Switzerland, live their lives renting real estate,” he said.
According to Dubvnikov, if the situation does not change, real estate can be “managed only by wealthy families and investment funds” in the future.
Vytautas Žukauskas, an expert at the Lithuanian Free Market Institute, emphasized that the bubble in the real estate and financial markets is bursting due to the fact that the role of money as a means of saving is diminishing.
“Today we talk very little about money as a means of saving. It is very disastrous to save money these days. We exchange money for other savings. This is one of the reasons why now, when there is a lot of money, both the financial markets and the real estate is bubbling so strongly, ”said V. Žukauskas.
Taurimas Valys, a member of the council of the Vilnius Chamber of Commerce, Industry and Crafts, said that the situation on the property market reminds him of a “horror movie” and compared it to the situation in 2006-2007.
“Now we see exactly the same thing that happened in 2006-2007, the apartments are sold without being seen, without going, according to visualizations, the prices in some places are close to London, near the cities of Switzerland, we see 10-12 thousand. prices per square meter, ”he said.
Statistics show that last year, house prices increased more than 6 percent compared to the previous year.
The European Central Bank bases its free monetary policy on the need to stimulate the economy of the eurozone affected by the coronavirus pandemic.
To this end, it runs an extensive bond purchase program and maintains historically low interest rates.
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