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According to him, at the beginning of the pandemic, it seemed that the impact on the housing market could be greater, as rental prices fell by around a tenth, especially in Vilnius.
“However, rental prices have recovered very quickly and are now more or less the same as in the beginning. Sales prices are also increasing, both by looking at advertisements and by monitoring the number of transactions,” said N. Mačiulis at the presentation of Swedbank’s economic review.
According to him, such a rapid recovery is not very surprising, because the crisis did not cause a particularly severe negative shock to the labor market and the income of the population, on the contrary, people were able to save.
“Residents have saved and received additional income from various sources. Deposits in September compared to September last year amounted to 2 billion euros higher. Yes, the population did not spend money during the pandemic, did not spend money on the abroad, the need to buy some goods and services has decreased, so the population is trying to use savings, ”said N. Mačiulis.
“There is no reason why there should be less activity in the housing market. Record incomes, record low interest rates, the population has a record number of deposits (…) here the golden age for the housing market. housing, ”said the economist.
According to him, one of the reasons why people are willing to invest in housing is the expansionary monetary policy of central banks.
“With expansionary monetary and fiscal policies, the risk of inflation has increased in the long term, it is natural that this is one of the ways to protect against inflation: investing in real estate,” said N. Mačiulis.
Other reasons are low interest rates, which are expected to remain similar in the coming years, and activity is aided by the fact that many residents do not buy their first home.
“Many neighbors do not buy the first one, but change their home, review their needs. Again, those greater wants and needs can be satisfied, because employment this year is similar to that of the beginning of the year, incomes are increasing, interest rates remain low, deposits are at all-time highs, “said the economist.
The Records Center announced on Thursday that activity in the real estate market did not decline in October, when the pandemic situation worsened in Lithuania: sales of apartments, residential houses and land were the highest this year.
However, representatives of the Registry Center warned that with the increase in the number of diseases in the country and the reintroduction of the quarantine regime, uncertainty may return to the market, which would adjust the dynamics of the real estate market.
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