A public opinion survey commissioned by the real estate development company “Darnu Group” revealed that 59 percent residents of the country’s big cities with medium and higher incomes would agree to pay up to 150 thousand for an apartment. euros. According to the survey, 9 out of 10 respondents would borrow money from a bank to buy a home, and every fifth would cover the majority of the amount of the purchased apartment from savings. Experts warn that saving for a down payment in 2023 may be more difficult, so you need to carefully evaluate your options.
According to the research, the largest share of the respondents is about 26 percent. plans to invest in a new apartment from 100 to 150 thousand. euros. About 22 percent respondents would like to allocate 50-100 thousand for the purchase of an apartment. euros, and 11 percent – amount up to 50 thousand euros. Residents of Kaunas and Klaipėda plan to spend a smaller amount on housing, and this is influenced by the larger supply and lower real estate prices in these cities.
The research was carried out by the company “Spinter tyrimai”, which surveyed the residents of Vilnius, Kaunas and Klaipėda between the ages of 18 and 75, whose monthly income per household member starts from 1,100 euros. The survey showed that about 6 percent intend to buy an apartment this year. of those interviewed, 12 percent respondents intend to do so in the next 3 years, and 24% – they have not defined a specific term.
Adjusts expectations
“After the pandemic, the increase in apartment prices was caused by reduced supply, inflation and increased construction costs. Unfortunately, time has not played in favor of the buyers, because those who doubted buying a home a few years ago can afford a much more modest option for the same amount today, so they have to adjust their expectations”, says Lina Morkūnienė, Darnu Group sales manager manager.
The survey showed that more than a fifth – about 22 percent. – respondents would agree to invest 150 to 200 thousand in new houses. euros, and about 19 percent – more than 200 thousand euros.
According to L. Morkūnienė, those who are looking for an apartment for themselves – for life – tend to spend a larger amount of money more often and bolder. Such buyers do not expect to make money, but look at the long-term perspective of personal life and convenience.
“Own housing is one of the most important purchases in life, so these buyers take a long time to make a decision, consider more than one option, delve deeper into the technical characteristics, the neighborhood, urban development plans in the surrounding areas. Often they have or are planning a family, so they are looking for a larger area. Our experience shows that for the aforementioned reasons, buyers in this category are usually willing to spend a larger amount of money,” says L. Morkūnienė.
The expert adds that most of the new apartments built during the growth years were bought out, and new projects are still being developed or planned, so the choice in the primary market, especially in the capital, is extremely limited.
According to L. Morkūnienė, the empty market warehouse not only adjusts expectations, but also forces the decision to be postponed for the future, because at the moment it is more often necessary to choose only from what is available, and not to purchase a dream house. Buyers who have and are ready to spend larger sums of money do not want to rush to pay for housing that does not fully meet their personal needs, so they prefer to wait.
9 out of 10 would turn to banks
According to the research conducted by “Darnu Group”, about 20 percent of the respondents indicate that more than half of the amount of the purchased apartment could be covered from savings, and the rest would be borrowed. 29 percent of those interviewed, most of the amount would be covered by a loan, a smaller amount by savings, and 30% savings could only cover the down payment for the purchase of a home. 11 percent respondents claim that they cannot afford to cover even the down payment for a house from their savings.
The absolute majority – about 89 percent. of the respondents indicated that they would apply to a bank for a home loan, the rest would borrow from family members, friends, credit unions or use alternative sources of borrowing.
It encourages you to evaluate your options
Before taking a home loan, experts urge you to evaluate your options. According to Modest Kieras, head of the Private Client Financing Department of SEB banka, the average housing price in Lithuania grew faster than the average household income last year, inflation was high, so saving for the down payment for housing in 2023 will become more and more difficult.
“The rising prices of housing, energy resources and interbank interest rates are already increasing the anxiety of customers and encourage them to more carefully evaluate their opportunities to purchase a home,” says M. Kieras. According to him, there are no plans to change the conditions of housing loans, but due to the rapid rise in the EURIBOR interest rate, many residents who have taken out housing loans have felt the increase in the cost of loans.
According to the representative of SEB bank, in Lithuania the ratio of contribution to income should not exceed 40 percent. Therefore, if a resident’s disposable income is 1,000 euros per month, the maximum amount of financial obligations can be 400 euros in one month.
“A family, in order to live comfortably and not feel too constrained, should not have more than 50% to spend their income on necessary expenses. Financial obligations are part of the necessary expenses, as well as food, transport, utility bills. Therefore, if you borrow the maximum amount, it is likely that you will not have enough money to meet all other necessary needs and you will have to pay them with your free time or savings,” says M. Kier.
More information
Martynas Pasiliauskas, Integrity PR
martynas@integrity.lt / +37062041065
