2013-11-12
Banks’ and population’s perception of real estate market prospects has improved
While most banks and households are still not expecting any significant real estate market changes, the number of those believing that the market stagnation has ended and prices will rise moderately in the long run is increasing, show bank lending surveys conducted by order of the Bank of Lithuania.
“More than half of the surveyed banks expect new construction housing prices to rise by up to one-tenth in the next half-year. The old construction housing market trends are perceived much more cautiously, though — more banks expect price drops of up to 10 per cent,” says Virgilijus Rutkauskas, Chief Economist of the Macroprudential Analysis Division of the Financial Stability Department of the Bank of Lithuania.
According to him, banks also perceive quite optimistically commercial real estate market prospects — nearly half of the surveyed respondents expect commercial premise price increases.
The proportion of households expecting real estate price increases from 31.1 per cent to 35.9 per cent grew also over the recent half-year. However, the proportion of households not expecting price increases is still the largest — 39.7 per cent.
The proportion of banks anticipating real estate price increases has been increasing for a second half-year; the share of those believing that the stagnation in Lithuania’s real estate market has ended is increasing as well. However, the same proportion of banks thinks that real estate market trends will be moderate up until the end of 2014.