EU – Baltic States, Financial Services, Lithuania, Real Estate

"Rapid growth in real estate prices in Sweden and Norway raise concerns for other countries in the region. Lithuania, having learnt its lesson from the crisis, is one of the first in the region to have implemented measures to limit possibilities for price bubbles to form. We are prepared to share this experience with our neighbors," s Vitas Vasiliauskas, chairman of the board at the Bank of Lithuania, said in a press release.

Vasiliauskas will discuss measures to prevent real estate bubble with the heads of Finnish banks in Helsinki on Monday.

According to the Bank of Lithuania, "the development of real estate prices in the Nordic and Baltic countries is uneven, while possible disbalances in one country may have an impact on the financial systems of the other closely interrelated countries in the region".

Unlike in other countries in the Nordic and Baltic region where the financial crisis slowed the rise in residential property prices down, home prices in Sweden and Norway continued to rise at a significantly faster rate than people's incomes. At the same time, households' debts continued to grow and major Scandinavian banks continued to increase their loan portfolios, the central bank said.

As the financial systems of the Nordic and Baltic countries are very closely interrelated, disbalances in some of the Scandinavian countries may also have an impact on the financial system of other countries, including Lithuania, it said.