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The sudden recovery of the real estate market (RE) in Lithuania is not surprising, as the population managed to save money during the pandemic, says Nerijus Maiulis, chief economist at Swedbank. He called the current situation in the housing market a golden amy.
According to him, at the beginning of the pandemic, it seems that the ratio of the housing market may be higher, since rental prices have fallen by almost a tenth, especially in Vilnius.
However, rental prices have recovered very quickly and there is now quite a recovery. Sales prices are also increasing, both in announcements and in tracking the number of transactions, says N. Maiulis in presenting Swedbank’s economic review.
According to him, such a rapid recovery is not very surprising, because the crisis did not cause a particularly negative reason for the labor market and the income of the population, on the contrary, mons managed to save.
Residents are saving and receiving additional income from various sources. Deposits in September, compared to September last year, were 2 billion. Higher Eur. Yes, the population did not earn money during the pandemic, they did not earn money abroad, the need to buy some goods and services was reduced, so residents are trying to save their savings, N. Maiulis considers.
There is no reason why there should be less activity in the housing market. Record incomes, record low wages, the population has a record contribution (…) to the golden age of the housing market, said the economist.
According to him, one focus is why companies are willing to invest in an expansionary central bank monetary policy.
With expansionary monetary and fiscal policies, the risk of inflation has increased in the long term, it is natural that this is a way to protect against inflation by investing in real estate, said N. Maiulis.
Other reasons for emos are salaries, which should also hold up for years to come, and the fact that many residents are not buying their homes for the first time.
Many residents do not buy first, but change their condition, change their needs. Once again, those increased wants and needs can be met, as employment this year is similar to that of the beginning of the year, incomes are increasing, wages remain low, deposits are at record levels, the economist said.
The Registration Center announced on Thursday that activity in the real estate market will not continue in October, when the pandemic situation in Lithuania worsened, sales of plots and residential land were the highest this year.
However, the representatives of the Registry Center warned that as the number of diseases in the country grows and the quarantine regime reappears, uncertainty may develop in the market, which would adjust the dynamics of the real estate market.
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