Lithuania's central bank has announced measures to cool down the real estate market amid expectations of double-digit rises in property prices.
The Bank of Lithuania has proposed increasing the down payment requirement for second-home mortgages. Moreover, lenders would have to keep an additional 2-percent capital buffer in their housing loans portfolio.
“The new requirements are to enter into force on January 1 and July 1, 2022, respectively,” the Bank of Lithuania said in a press release on Tuesday.
Housing prices have been on a steep rise in recent years, particularly in Vilnius.
A survey conducted by the Bank of Lithuania shows that commercial banks expect continuing growth in real estate prices.
All the surveyed banks think that newly constructed properties will further appreciate. Eight out of nine said prices for old apartments were also likely to rise.
Two of the surveyed banks expect that prices will jump by more than 10 percent.