Threat: housing aid can hit the other end

Tomas Garbaravičius, member of the board of directors of the Bank of Lithuania (LB), said that by further increasing the help given to young families for the purchase of a first housing in the regions, such actions could unbalance the market or increase housing prices.

In this year 's budget, these grants amount to 4 million euros. 10 million euros are expected next year. euro LB estimates that this volume of loans could increase by 27 million this year. EUR and others – 70 million According to T. Garbaravičius, this would represent 14%. the annual volume of mortgages in the respective regions.

"14 per cent, there is a lot, if in Lithuania, the mortgage would increase by 14%, the Bank of Lithuania would take concrete action.It is clear that the market is less liquid in these areas and this growth will have an effect "said T. Garbaravičius, at the annual LB Real Estate Conference.

LB still does not see the threat that these borrowings will unbalance the market or cause real estate prices, but if the subsidies increase significantly, the bank would already start to worry, said a LB board member .

"The simplest way is to distribute money, but it does not balance the market, the entrances will become more expensive and it will be more difficult for people to buy money (housing – SNB)" , – noted T. Garbaravičius.

According to him, in general, using measures to increase demand, for example the repayment of the initial contribution, it is also necessary to consider supply-side measures.

"You have to look for a balance (…), but with the offer, it is much more complicated.In addition, housing badistance has always been provided, but the rent is forgotten. Why always need to support a purchase, not a lease? It would also be good to find a balance, because the markets of the purchase and the leasing are related.If we only weigh a balance, the scales of the market, – said T. Garbaravičius.

Starting September 1, the government provides grants to young families to cover part of the first mortgage or to cover the initial contribution. The loan amount can not exceed $ 87,000. euro

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