Investing into Residential Real Estate in Lithuania - Value Drivers and Risks for Individual Investors

Ieva Augutyte-Kvedaraviciene

ERES from European Real Estate Society (ERES)

Abstract: Real estate investments become more and more popular form of investing in Lithuania. Prime reasons for this are relatively cheap financing, growing income of residents and growing economy in general. Investments into residential real estate represent the most popular type of real estate investment among individual investors. When buying a residential unit with the purpose of value appreciation and income generation, individual investors often overlook major value drivers for real estate investments in a long run. Overconfidence, normalcy bias, expectation bias, bandwagon effect and other cognitive biases in decision making may lead to overvaluation of particular investment, general growth of demand and, finally, prices of real estate. The paper discusses major value drivers of residential real estate and major risks when investing into residential property, with special attention to low financial literacy of market participants, major cognitive decision making biases and limited knowledge how real estate market operates in general.

Keywords: decision making biases; Investments; Residential Real Estate; Risk; value drivers (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2017-07-01
New Economics Papers: this item is included in nep-fle and nep-ure
References: Add references at CitEc
Citations:

Downloads: (external link)
https://eres.architexturez.net/doc/oai-eres-id-eres2017-22 (text/html)
https://eres.architexturez.net/system/files/22.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2017_22

Access Statistics for this paper

More papers in ERES from European Real Estate Society (ERES) Contact information at EDIRC.
Bibliographic data for series maintained by Architexturez Imprints ().