Assessing Lithuanian housing market for bubble

Abstract

This is a simple practice undertaking assessing Lithuanian housing market for bubble. A triangulation of historical comparison and Price to Income Ratio are used to screen the market. The overall estimates suggest that current house prices in Lithuania are within historical averages and statistical thresholds. Housing is certainly not in a bubble. Considering market prospects, prices have room for further inflation, ceteris paribus. Prospective buyers are advised to enter the market even though current house price levels may seem elevated for some, whereas the best time to buy a property was twenty years ago anyway. For institutions that have a long-term investment horizon, multifamily in key Lithuanian cities is an attractive investment conduit.