Concerns about the impact of the immigration crisis on the real estate market: a temporary threat to property values

Call it a threat to property value.

With Lithuania detaining more than a hundred migrants illegally crossing the Lithuanian-Belarusian border in one day, the country is currently facing extraordinary challenges that, according to Martika Žibūda, Eika’s director of development, can affect real estate at the border. and near the border with Belarus.

“It seems that a bigger local threat to the real estate market than the possible third quarantine in the fall is the migration crisis, just because of its uniqueness and uncertainty.

After all, we still don’t know how much of a problem this is and in which direction it can turn, and there are many different scenarios here.

I think this is a much bigger challenge because, again, we are on the fringes of the EU, which is receiving a significant impact. I get signals from businessmen living in Dzūkija, along the border, that they are concerned about what is happening here.

For a city like Druskininkai, which is an important market for second homes, housing and healthcare services, this type of challenge is a significant threat that could affect the value of real estate in the near future, ”he said.

Risk is seen only for single-family homes and farms

Mindaugas Statulevičius, president of the Lithuanian Real Estate Development Association (LNTPA), did not share such ideas.

According to him, there has been a lot of discussion about the value of property not only at the border and when the Astrava nuclear power plant was being built, but those speeches did not work.

“The realities of today, so far, in my opinion, do not have a significant impact on the price of the property and, at the same time, on its safety in this region.

Yes, it is also the property of the second home, property segment, for which the natural neighborhood, recreation, the availability of SPA services are important and as long as it is insured, the service business will not move, it is likely that if the state takes active steps to stop the flow, it should slow down during the cold season.

He said he sees a higher risk unless he plans to sell individual farms in the border region.

“Perhaps people would be more sensitive when buying property and would rather develop close to settlements, be close to neighbors, so housing in a regional city even gets an advantage.

A longer-term negative impact on the region’s real estate market would occur if the State did not find ways to restrict migration in the long term and in case of crimes by emigrants, ”he said.

The number of transactions may decrease

Swedbank economist Nerijus Mačiulis assured that the value of real estate could change only due to a migratory crisis of this type, which has consequences and is permanent, and would mean that the border section has become a source of danger or risk. .

“We just realized that it couldn’t be affected because it was a temporary crisis.

Maybe the number of transactions will decrease this year, maybe it seems unattractive to someone (bought), but I also doubt that somehow I can fundamentally change everything.

Until now, according to many characteristics, this is not the type of crisis that could change the real estate market even in the towns closest to the border, ”said the economist.

He assured that he still does not see that this crisis would affect in any way the economy of our country or the expectations about real estate prices, as well as the decisions to acquire real estate in one place or another.

“Of course, when it comes to farms or single-family homes that are all over the border, there may be some things there, but that’s less than 1 percent. Real estate markets ”, commented N. Mačiulis.