The banking sector in Lithuania is seeing sustainable growth throughout the first half of this year. Meanwhile, new home loan rates shrank by 0.7 percent points and are now down to 3.1%, which is the lowest since the collection of data began in October 2004.

Inflation in June of 2012 compared to June 2011 is 2.9 percent, while last July’s inflation was 4.6 compared to the previous year.

It seems Lithuanian households are recovering well after the latest financial crisis. In the first half of 2012, bank deposits consistently continue to grow mounting up by 921 million (2.1%) up to 44.1 billion Litas. According to the Central Bank of Lithuania, this growth is mainly due to a strong increase in household deposits.

With more money in the bank, households are quicker on returning their loans. A clear sign of this is that the total home loan portfolio shrank by 1 percent, to 19.37 billion Litas, The Lithuania Tribune reported.

Moreover, households are also keener on new house loans. While home loan interest rates were record high in October of 2008, namely 6.47%, they are now a mere 3.1 percent on average.

SEB bank claims the number of housing loans it issued this year increased by nearly 10 percent compared to the same period last year. What is more, the consumers expect property prices to decline even further. According to SEB Bank, around 20% of their surveyed households hope the housing prices will fall.

Still economists note that, although Lithuania has had many good news regarding its economy for its households, there are still warnings of a second financial crisis around the corner. It is therefore the consumer’s choice to decide, whether it is wise to take out a loan now.

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