“Interest in property acquisition was fuelled by declining unemployment and faster growth in real wages, which saw an increasing number of households able to save up for the down payment. At the same time, historically low mortgage interest rates and improvements in the outlook of property market encourage borrowing for housing acquisition and investing in property in pursuit of larger return,” Vaiva Šečkutė, senior economist at Swedbank, said in a press release.
Housing Affordability Index (HAI) for Vilnius rose by 19 points in the second quarter of this year from a year ago, to 128.9 points, which means that wages in the Lithuanian capital exceeded the amount sufficient to be able to acquire a standard apartment by 28.9 percent.
“Looking at the three Baltic capitals, Vilnians had to see most clearly that housing had become more affordable. For comparison, in Riga housing affordability improved by 14 points, and in Tallinn, by meager 1 point. Despite that, the wages in Tallinn and in Riga exceeded the amounts sufficient to be able to acquire an apartment in the respective city by 65 percent and 59.4 percent, respectively,” Šečkutė said.
Apartment prices in Vilnius fell by 2.8 percent in the second quarter of this year from the same period last year.
