In the housing market of Lithuania, prices are exaggerated by ten percent amid a set of crises facing the economy, the Bank of Lithuania evaluated on Monday, May 6, LRT and Vaida Kalinkaitė-Matuliauskienė report.
Lithuanian financial system is currently exposed to three major risks – the aftermath of Russia’s war against Ukraine, the overheating of the housing market, and the persistence of inflation and a possible increase in interest rates – Gediminas Šimkus, head of Lithuania’s central bank, explained in a press conference.
Read also: Eurozone’s fastest inflation last month seen in Estonia
Šimkus pointed to the overheating of the housing market. «Housing prices continue to rise rapidly and have reached their highest rate since 2007. […] Housing prices are exceeding economically justified values by a tenth. There is an overvaluation,» the head of the Bank of Lithuania noted.
Prior to the 2008 economic crisis, housing was overvalued by 50 percent, so the current situation is still quite rational, Šimkus put the current situation in a context. «This increase in housing prices is due to a growing imbalance between the demand for and supply of housing,» the governor of the Bank of Lithuania evaluated.
The article originally appeared on LRT English: https://www.lrt.lt/en/news-in-english/19/1712777/housing-in-lithuania-overvalued-by-a-tenth-central-bank
Housing in Lithuania overvalued by 10%, says central bank
