Fewer banks project housing price increases in Lithuania

“Last spring the euro adoption-related real estate price increases did not live up to the expectations; currently price projections are much more moderate. The absolute majority of the surveyed banks project price stability,” says Darius Kulikauskas, Head of the Macroprudential Division of the Financial Stability Department at the Bank of Lithuania.

According to the survey data, over 80 percent of banks expect that next year real estate prices will remain unchanged. For comparison, a year ago, two-thirds of those surveyed projected price increases, while stable prices were expected by a mere 30 percent of those surveyed.

Banks’ perception of the outlook for the housing market and commercial property market varies. 9 percent of respondents reported that the prices of old-construction buildings would decrease by no more than a tenth, while 18 percent of the surveyed banks expected a fall in the prices of new-construction buildings over the next year. Just one in eleven surveyed banks expected growth in commercial property prices of up to 10 percent.