The expert reviewed the changes in the housing market, but doubts about real estate prices: the next three years are unpredictable

Luminor Bank in Lithuania, Latvia, and Estonia surveyed residents about their home buying needs and opportunities, shared their views on changes in the housing market in the near future, and shared the results in a discussion on line. Andrius Kvakšys, director of the mortgage credit product at Luminor’s Bank, says that the survey results, as expected, showed that the financial situation of the Baltic population has not only not deteriorated, but has also improved.

“In the first place, the pandemic did not have a significant impact on the financial situation. People have enough money to buy a home with credit. In addition to the opportunities, needs arose. We work from home, we need a larger, separate space, etc. . ”, – A. Kvakšys mentions trends.

On the other hand, according to him, the survey sought to know how many Lithuanians decided to buy a house this year. The results showed that 25% of all respondents. made a decision about your own home.

There are also interesting trends in second home acquisition statistics. A. Kvakšys says that there is a significant increase in prices and demand in the farm segment.

“In the farm segment, the demand is inhumane, but I’m afraid the price still scares people. Up to 30 thousand. The properties are bought quickly, and where more money is needed, people doubt it,” says the expert. .

He goes on to say that there is also a high demand and an increase in property prices on the Lithuanian coast. True, it can be noted that prices are a little more modest on the Latvian coast, but the interlocutor has an explanation for this: it is determined by the size of the coastal area and its level of development. The Lithuanian coast really has a well developed infrastructure, it is maintained and real estate is constantly developing here. This increases the value of the property here.

He is reluctant to make price forecasts.

The survey also tried to assess the differences in housing opportunities in the Baltic states. The results show that Lithuania issues probably the largest number of loans, this year it has been issued one and a half times more and the average size of loans has grown by 20%. by year. However, in terms of housing affordability, Estonians are likely to save money on the down payment. On the other hand, your income is the highest.

When assessing the affordability of property, it should be emphasized that about half of the housing in Lithuania is bought without a loan and this has not changed for many years. It is true that the age of the home buyer is getting younger and younger.

“When it comes to youth, the trends are surprising. The owner is usually a family developer who has started a career, has accumulated money for a contribution and the need for housing arises when starting a family. This was a stable trend. And more than half of the people who take out a mortgage are between the ages of 25 and 34. Another group when it comes to buying a second home or a children’s home. And one sixth of home loan recipients are under the age of 25 ”Says A. Kvakšys.

Only slightly less than half of those surveyed have no regrets at all about buying a home when they have done so and would not change a thing, even if they had the chance. 39% are fully satisfied with their home in Lithuania, 49% in Estonia and 42% in Latvia. surveyed. If the decision to buy a house were made now, the population would better evaluate its quality, according to a survey of 21%. Lithuanians, 17 percent. Latvians and 18 percent. Estonian.

The interlocutor also shared some tips for those planning to buy a home during the discussion. First, you need to assess that the interest rate on a home loan can go up. Currently, it is extremely low (around 2%), but, according to the expert, the situation will change sooner or later, interest rates can rise up to 5%. In addition, according to the interlocutor, it is necessary to assess the risks when buying an apartment from the drawings: assess what buildings will be around, the view through the windows, the infrastructure, the neighborhood, etc. In addition, the purpose of the apartment is purchased.

“The legal situation of the house must be evaluated. Because we have several apartments in Vilnius that do not have the apartment category. These are creative workshops, salons. Everything is legal, but that property can be taxed, it is subject to other requirements as far as to acoustic insulation, green spaces, parking lots ”, explains the interlocutor.

Speaking of the short-term prospects for the real estate market, the interlocutor emphasizes that the supply of new-build housing should grow and this should stabilize real estate prices. On the other hand, they will go up or down, and the next three years are not worth predicting.