We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
PRICE BUBBLE IN THE LITHUANIAN REAL ESTATE MARKET?
- Authors
Zalieckaitė, Deimantė; Snieška, Vytautas; Vasauskaitė, Jovita; Remeikienė, Rita
- Abstract
The processes of Lithuania's integration into the European Union, international capital and investment flows and asset management in international corporations more activity to the processes in the real estate market in Lithuania. The factors determining the growth of real estate prices may be objective (growing macroeconomic indicators such as GDP, average wage, decreasing inflation in the country and the growth of the portfolio of credits for the acquisition of housing, etc.) and subjective (expectations of the market participants that are not based on psychological and economic laws). The latter are assigned to bullmarket features. The emergence of price bubbles should be identified as soon as possible in order to avoid likely economic consequences. It is rather difficult to identify price bubbles because certain factors, such as investments from abroad, joining the EU, introduction of euro and the like raise the real estate prices within a short period of time. However, there is an economic basis for the growth of prices based on the mentioned factors. It only partially may be associated with the psychological race between the market participants expecting easy and fast profit. Despite features of bull-market, which may be characterised by the psychological euphoria attributes, it could not be stated that a sudden jump in prices is necessarily an indicator of a price bubble because sudden changes in the country may cause a shocking but substantiated jump in prices. There have not been determined reliable and unambiguous features of real estate price bubbles. Even if it were possible to identify price bubbles, monetary policy would still be too weak to curb possible economic circumstances.
- Subjects
REAL estate business; PRICE regulation; ECONOMIC forecasting; BANKING laws; REAL property
- Publication
Economics & Management, 2007, p946
- ISSN
1822-6515
- Publication type
Article