BUSINESS REAL ESTATE
Mr Maurice: The demand for cheaper housing has fallen, which has led to a slight decrease in its price.
In the first quarter of this year, a slight fall in the price of housing built and not renovated during the Soviet era was recorded, but the price of other real estate (RE) remained stable. Sigismund Mauricas, an economist at Luminor Bank, predicts that prices for economic housing should stabilize this year. The review of the real estate market of Luminor Bank shows that in the first quarter of this year, real estate prices in Vilnius did not change significantly, only unrenovated apartments built during the Soviet era became cheaper by 5 per cent. Their cost per square meter now reaches 1800-2300 euros. "In Lithuania, real estate prices are stable, the price of economy-class housing has decreased the most. This situation was due to the fact that the situation of buyers of economy-class housing due to rising energy, grocery prices, as well as rising interest on loans worsened, as a result of which their ability to purchase housing decreased. This led to changes in this particular market share, when no major price changes were recorded in other market segments at that time," said Mauricas. Sigismund Maurice.
As the real estate price bubble does not burst, just over half of the country's residents postpone the purchase of housing lithuania The main Lithuanian housing disadvantages – high heating and electricity bills. The contraction of the economy-class housing market is also indicated by the fact that the amount of the average home loan issued at Luminor Bank has increased from 100 to 113 thousand. although the overall house price index has remained unchanged significantly since September 2022. "Such data suggests that more expensive housing purchases are more common, the buyers of which have not been so severely affected by rising prices and rising interest rates. This means that the demand for cheaper housing has fallen, which has led to a slight decrease in its price as well," said luminor's chief economist.
According to him, the prices of housing in the middle and upper classes have not changed significantly, in reality, prices have not increased for more than half a year. Mr Maurice predicts that next winter, compared to last winter, heating, electricity and gas prices will be significantly lower, so it is likely that the cost of utilities will no longer be one of the main threats to the financial stability of the population. Falling energy prices will also reduce the prices of other goods, such as food, so overall inflation will also decrease significantly. Falling inflation should also lead to the fact that EURIBOR will stop rising in the second half of this year, and by the end of this year we may also see a reduction in interest rates. "The situation should stabilize, those residents who have recently been held back by the constant growth of EURIBOR are likely to make decisions to acquire real estate, so a more significant correction in real estate prices is likely to be avoided," said the chief economist at Luminor Bank.
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