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Apartment sales statistics from recent years show that the number of people buying homes with their own funds without bank loans is increasing.
Apartment sales statistics for recent years show that the number of people who buy housing with their own funds without bank loans is increasing. According to real estate development experts, the trend of buying new housing with their own savings was particularly evident last year, when active apartment sales were recorded. Apartments built by the real estate company “Eika” were purchased with their own funds by almost two-thirds, i.e. 62 percent. buyers last year. Similar statistics were recorded at the beginning of this year.
The improving financial situation of home buyers is shown by the statistics of the company “Eika” for the last four years. In 2011, as many as 62 percent of people bought apartments with a bank loan, a year later their number decreased to 55 percent, in 2013 they accounted for 48 percent of buyers, and last year – only 38 percent. It is predicted that this year the percentage of those taking out loans from a bank will remain similar to last year.
Spend more money on the decoration and quality of the apartment
Real estate development experts are calling last year the year of investors, as the number of buyers purchasing new apartments with their own funds has increased significantly. According to them, residents were encouraged to invest in real estate by the upcoming introduction of the euro and, as this year, low deposit interest rates.
“Some residents who wanted to avoid exchanging their savings in litas for euros rushed to purchase housing before the introduction of the new currency. People also bought real estate believing that housing prices might rise after the introduction of the euro. In addition, last year, buyers allocated more of their funds to complete the decoration of their homes and the quality of life in them,” comments Martynas Žibūda, Development Director of Eika.
Buyers of economy-class apartments borrow most often, buyers of prestigious-class apartments least often.
According to Eika data, currently, buyers who intend to purchase a new economy-class apartment most often take out a loan from a bank. In such projects, up to 70 percent of apartments are purchased with a bank loan.
“Economy class housing buyers tend to invest as little equity as possible, so they usually borrow the maximum amount from the bank. They also often look for housing with full finishing, which is why we provide this type of service to our buyers. The client simply chooses a housing that meets their needs, and we equip it according to individual wishes,” says M. Žibūda.
Middle-class home buyers borrow from the bank less often than economy-class buyers. In the aforementioned projects, up to 50 percent of apartments are purchased with a bank loan. More often, buyers borrow only part of the amount, and invest themselves, for example, 30 percent. of the value of the home. They also more often furnish the home with their own funds, and full finishing is less relevant for them.
In the luxury apartment market, only 10–20% of buyers take out bank loans. When buying expensive housing, they take out credit for only a small part of the property. They are rarely satisfied with standard finishing solutions – they seek unconventional, original ideas for housing, which is why they consult interior designers.
About the Eika group of companies
Founded in 1992, Eika is one of the largest real estate development and construction groups in Lithuania. The group of companies consists of: UAB Eika – a leader in the real estate market, valued for its innovation, reliability and responsibility; UAB Eikos statyba – a construction company with extensive experience in the construction and renovation of administrative, public, commercial, industrial and residential buildings.
More information:
Vitalija Roče
Marketing and Communications Manager
Phone: +370 698 56273
Email: [email protected]