By Sandra Vilimaitė, LRT RADIO, LRT.lt.
The Bank of Lithuania is recording a rapid acceleration in house price growth, which has doubled since the start of the year. Economists are divided – some warn that a property bubble is forming, while others say the rise in prices is, for now, justified.
SEB Bank economist Tadas Povilauskas says signs typical of a bubble are emerging in the property market. He argues that this is being driven not only by price dynamics but also by household expectations.
“Our survey shows that almost 70% of residents expect house prices to rise over the next 12 months. Over the 14 years of observation, this is the second-highest figure,” the economist says.
According to him, higher expectations were recorded only at the start of 2022, before a period when prices rose by more than 20% over several years.
Povilauskas points out that this year, house prices have grown faster than wages, meaning affordability is deteriorating.
Read more: LRT.LT
