Lithuanians who have saved money allow themselves to have a more comfortable life: they no longer count sums for luxury homes

Opt for a more spacious home

During the first quarantine, in the spring of last year, real estate experts and sellers noticed a growing interest from the population in more spacious homes: larger apartments, private houses or cabins. It is the demand for this type of property that has remained high during the summer and fall and continues to this day. Sigismund Mauricas, chief economist at Luminor Bank, says on Delfi’s Delfi Rytas television show that this and other changes in the real estate segment can be seen by studying both the Lithuanian and foreign markets.

“The changes are more or less similar in all countries. The first change, much more surprising, was the real estate activity. Contrary to what is feared, it has practically not decreased and, although we look at the second half of last year and early of this, it was a historical activity record for some segments. This encourages more time at home, the popularity of working from home, people pay more attention to the quality of their home. If someone starts to dislike you, they are looking for a new housing and the number of transactions is high. This is noticeable in those countries that have been slightly affected by the pandemic, “says the economist.

He goes on to say that houses are becoming a more popular and common option than small or medium-sized apartments. There is also a growing demand for land for the construction of private homes.

“If this continues, it will cause many challenges, especially for Vilnius, Kaunas and Klaipėda, because people are likely to flow even more from city centers to suburbs, which will create challenges for infrastructure, etc.”, Ž notes . Mauricas.

The economist points out that metropolitan areas around the world are emptying out: Paris, New York, London have already lost a significant part of their population working remotely, leaving noisy metropolitan areas and moving to smaller towns or suburbs where they live less .

New homes are still popular

On the other hand, according to Ž. Maurico, the standard two-room apartments, which are still attractive in Lithuania, should not be underestimated.

“We still have the challenge that there is not enough new construction and the neighbors prefer it,” says the interlocutor.

Speaking about the upcoming trends in the real estate market, the economist says that on the one hand, new construction housing will continue to be in demand, but real estate buyers will increasingly seek larger and more spacious homes and move into a house of field or cabin if they cannot find it in the city. This can also adjust real estate prices: they can fluctuate in those segments that will be most popular. However, in the short term, the economist does not predict significant price growth.

“In the short term, very high growth should not be expected, more prices will depend on demand. If there is a movement from the city to the suburbs, then the prices should be the same and the price trends in the main Lithuanian cities will depend on the migration trends. “It is more likely that there are homes with a larger area, especially with increasing income levels,” says the economist.

Loans are growing and growing

An economist at Luminor Bank says that the number of home loans made by banks has also increased, as has the average size of loans. Swedbank also talks about that. The bank estimates that last year, the average home loan, compared to 2019, increased by 8 percent. and amounted to about 73.5 thousand. Show Swedbank data. Residents who acquired a home with a loan significantly increased the amount of the initial contribution: it increased by a fifth and at the end of last year amounted to an average of 23 thousand. euros. There was also notable interest from residents in larger homes.

“The direct impact of the pandemic on the housing market was short-lived, and in the second half of last year we observed an increase in the activity of the population applying for housing loans, which has been maintained until now. In addition, people who take out mortgages tend not to take excessive risks and contribute more with their own funds, which on average account for about a quarter of the total cost of the house, ”says Pavel Ladziato, director of retail banking at Swedbank.

According to him, the pandemic dictated a greater need for security, which increased the public’s interest in additional protection measures, such as mortgage payment insurance. This protection helps you meet your obligations in the event of unexpected financial difficulties.

Residents were looking for more spacious homes

Most of the real estate in the country consists of apartment buildings, and there are no big changes in the market by property type, but there is a tendency for Lithuanians to increasingly consider buying or building their own house.

According to Swedbank data, Swedbank provided about a third (33%) of all mortgage loans for the purchase, construction or completion of a home. Throughout the year, this proportion of loans increased by 3%. points.

“We see a trend that residents tend to choose individual houses in a rational way. They objectively assess the need for your family’s living space, calculate related house maintenance costs and your energy costs, ”says a representative from Swedbank.

According to Mr. Ladziato, when observing the details, it can be noticed that a little more than 100 square meters M. meter. The popularity of apartments is changing, as well as the trends of purchased houses – individual houses with an area of ​​up to 150 square meters. meter. Additionally, residents are investing more and more in energy efficiency and comfortable living conditions.

2 out of 3 mortgages – with co-debt

According to Swedbank, the average home loan increased 8% last year. up to 73.5 thousand. euros. However, this did not have a major impact on the population’s ability to repay mortgage payments.

“Residents pay a little more than a quarter of their monthly income or that of their family to cover the installments of a loan, and the average repayment term of a mortgage loan is 25 years”, comments the director of the Private Service Swedbank Customer.

According to data from Swedbank, the average net monthly income per person who lent to a home last year is 1.3 thousand. When applying for a loan with a co-borrower, they amount to about 2.1 thousand euros. euros. Approximately 2 out of every 3 mortgage loans are made to co-indebted clients.

Mr. Ladziato points out that in 9 out of 10 cases, residents process a home loan application, submit documents, sign a credit agreement and other related matters remotely online.