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In early May, the Records Center released the results of the April property market. Paulius Rudzkis, Head of the Data Analysis and Solutions Department of the Records Center, who visited Delfi.tv’s Monetary Affairs program, said real estate transaction statistics are slightly delayed because the Registration Center maintains sales statistics. real estate in accordance with the notarized contract for home sales transactions. Therefore, residents may have agreed to a new home with the seller in April, but the transaction has yet to be notarized.
For this reason, there is a delay of one month in the previous construction segment and 6 to 9 months in the new construction segment. delay Looking at the categories, we see similar numbers everywhere. In Vilnius, we see 19 percent. the decrease in transactions in April compared to last year, “explains P. Rudzkis.
According to the interlocutor, the real estate market is related to the country’s economy. Therefore, in the coming months we will definitely see a decrease in demand and this may affect not only the primary but also the secondary real estate market: “And how much that demand will decrease, we will see clear numbers in the coming months.”
The market can change in various scenarios.
Šarūnas Tarutis, Investment and Analysis Manager of the real estate company Citus, also participated in the show. According to him, the company has prepared several models that demonstrate how the real estate market may change in the near future.
“We are modeling the primary market, which will be in 6-9 months, those transactions that have not yet been notarized,” Š. Tarutis
Money
He went on to say that the company highlighted several possible scenarios for the real estate market. According to the pessimist, the company estimates that if the number of transactions remained the same as in April or increased only a small percentage, then the real estate market would suffer 60 percent. decrease in transactions.
“However, based on the realistic scenario, we see that as the fall school year the home rental market intensifies, it often acts as an accelerator for the entire property market. We try to speculate that there will be increased demand for transactions in the fall and that the fall will not be as great. If the number of transactions increased since the fall, the real estate sector would fall by approximately 30%. It should be noted that some transactions may not be carried out due to the developers’ decision to postpone the project. The situation that we have seen in the last six months has been an historical record. It is a fact that the cartel to which we have to return is very high. And when we see the market, how many developers are considering postponing projects, behaving more conservatively, returning to plan projects, then the market will not return to the same pace before a year ago, “said Š. Tarutis adds that if the fall It is not good, the earliest we will see the recovery of the real estate market may be next winter.
Mindaugas Statulevičius, head of the Lithuanian Real Estate Development Association, which participated in the discussion, also agreed that April had shown the worst figures. On the other hand, according to him, it is already notable that those buyers who looked at the home before quarantine, return and are interested in real estate.
They are already coming back, interested, so I think we will see another photo in May. It will be possible to assess more consistently in mid-June, when we will have three months from the beginning of the quarantine, “says M. Statulevičius on the situation in the real estate market.
Some projects may be postponed
The program also discussed possible changes in property prices. According to the interlocutors, the prices have not changed at this time, and if certain exceptional cases are notable, according to Š. Tarot buyers should be careful not to get caught by dishonest developers.
“Promotions and discounts should be considered very carefully, as some developers have based their sales on stocks in the past. It provided the buyer with bonus prices when offering additional benefits. Therefore, it is necessary to look at the same developer, either to increase discounts or add value to projects, “warned the interlocutor.
He went on to say that price reductions can be expected from those developers who will not be able to reach an agreement with their investors and who will have apartments built in reserve without being built. According to the interlocutor, most developers choose to postpone the development of projects than to sell apartments at lower prices.
“It just comes to our notice then. Pricing will depend on several components: which developers are currently on the market. We see that some developers are strong and choose to postpone projects that sell homes at a lower price. Also, developers have no pressure to buy the parcel, where there were difficulties in the past when parcels were bought from bank funds and banks demanded that the money be returned. Usually developers buy parcels of their capital. Of course, another project may appear on the market , when the developer has to settle for his investors, the apartments are already built, many of them, nobody has bought them. In this case, prices may fall. But it is difficult to say if they will decrease in the market. You have to give a month, two, “said the interlocutor.
M. Statulevičius added that those projects that have already been built will definitely be completed. They will be completed by those developers who started them. Unlike the previous crisis, when part of the projects were taken over by banks.
“We just realized that the market was strong. Clearly, there may be exceptions where inexperienced developers starting a business miscalculate their project revenue, more or less. And it can stop. As will be the case with projects that are in drawings are more likely to be postponed by developers as there may be a shortage of labor, they may start financing and only later receive funds for the development of the project. They eventually happen late. Of course you can there are some projects that will not be implemented, “emphasized the expert.
See the full conversation on Delfi.tv’s Monetary Affairs program.
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