Lithuania Eases Homebuying Rules as Prices Outpace Salaries

Housing prices in Lithuania's major cities have outpaced salary growth, making homeownership increasingly difficult. Data from "Ober-Haus" shows a 12.5% increase in apartment prices over the last 12 months, while average salaries rose by only 8.4% in the first quarter.

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Housing prices in Lithuanian cities rose 12.5% in the past year, while salaries increased by an average of 8.4%.

To address this affordability gap, the Bank of Lithuania will implement new responsible lending regulations starting in August. The minimum down payment for first-time homebuyers will be lowered from 15% to 10%. This change aims to ease the financial burden on individuals seeking to purchase their first property.

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The Bank of Lithuania is changing responsible lending rules from August, reducing the initial down payment for first-time homebuyers from 15% to 10%.

However, the effectiveness of this measure remains a subject of discussion. Experts are questioning whether the reduced down payment will be enough to help residents afford their first homes, given the continued rapid rise in property values. The situation was discussed on a program about the real estate market, featuring insights from Tadas Povilauskas, an economist at SEB bank, Raimondas Reginis, head of market research at "Ober-Haus" for the Baltic states, and Šarūnas Tarutis, director at "Citus."

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However, will that be enough for residents to afford their first home?