2013-05-06
Survey: commercial banks assess the prospects of the real estate market much more favourably—there is an increase in those that believe that the stagnation has ended.
Although a large part of commercial banks participating in the Bank of Lithuania’s survey indicated that they don’t expect changes in the price of real estate, there has been a significant increase in those that believe that the market's stagnation is over.
“In the period under analysis, there were more banks that believed in the rise of real estate prices than those that predicted a drop in prices. However, as in earlier surveys, a large number of banks (76%) indicated that they don’t expect a change in real estate prices in the future,” says Virgilijus Rutkauskas, Chief Economist of the Macroprudential Analysis Division of the Financial Stability Department of the Bank of Lithuania.
A third of respondents hope that in the coming years the price of old-construction housing will drop 10 per cent, while slightly more than half predict a rise in new-construction housing prices of up to 10 per cent. Banks participating in the survey don't expect that the prices of commercial premises will change.
Compared to the results of an analogous survey performed half a year ago, respondents slightly postponed the date of the end of the stagnation of the real estate market—until the end of 2014 or an even later period. On the other hand, the number of banks that indicated the already-ended stagnation of the real estate market grew three times.
The Bank of Lithuania, twice a year, conducts a survey of senior staff at commercial banks and foreign bank branches in regards to lending, presenting also additional questions on the real estate market and other factors that could impact lending.
In the March–April Bank of Lithuania survey, senior staff from six commercial banks and three foreign bank branches participated.
Detailed results of the newest bank survey will be published this week.