Although Estonia currently leads the Baltic countries in housing loan market activity, demand in Lithuania also remains high, with residents here more often looking at the mid-range and higher-value housing segments – reflecting growing expectations for housing quality.
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Counting the share of housing loans issued this year per capita, Estonia leads the Baltic countries. In this country, there are 225 euros of housing loans issued per resident, while in Lithuania it is 116 euros, and in Latvia only 54 euros. Since the average housing loan amount in Lithuania and Estonia differs relatively little, this gap is mainly due to more residents in Estonia purchasing housing with borrowed funds.
“The housing loan market in Lithuania continues to maintain a growth trend this year – from January to May its volume increased by 16 percent. This shows that despite the geopolitical background, people are still willing to invest in their own housing. Favorable conditions for this are provided by a stable labor market and steadily rising wages, so many residents feel confident enough to commit to a long-term financial obligation,” says Simonas Norbutas, Director of SEB Private Clients Financing Department.
According to S. Norbutas, although Estonians borrow for housing more often, Lithuanians are not far behind in average loan amount. This year, the amount in Lithuania is 124 thousand euros, in Estonia – 148 thousand euros, in Latvia – 100 thousand euros.
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These trends are also confirmed by a representative survey of Baltic country residents commissioned by SEB bank. According to its data, about 22 percent of Lithuanians planning to buy housing intend to allocate 50-100 thousand euros for this, about 20 percent each look at housing costing 100-150 thousand and 150-200 thousand euros. Nearly 14 percent of home buyers look in the price category above 200 thousand euros.
One in ten (9.5 percent) Lithuanians plans to spend up to 50 thousand euros on housing. Meanwhile, in Estonia and Latvia, the cheapest segment is considered by 13.8 percent and 35.4 percent respectively of residents planning to buy housing.
“The recent years’ development of the Lithuanian real estate market and the changed buyers’ understanding of housing value have formed a new reality. Today Lithuanians are looking not just for a roof over their heads or the cheapest square meters, but a sustainable long-term investment. The fact that more than a third of those planning to buy housing aim for an amount over 150 thousand euros shows that residents focus on quality, energy-efficient housing in big cities or newer construction houses in districts,” says S. Norbutas.
