Impact of the Economic Stimulus Measures on Lithuanian Real Estate Market under the Conditions of the COVID-19 Pandemic

Vaida Pilinkienė; Alina Stundziene; Evaldas Stankevičius; Andrius Grybauskas

doi:10.5755/j01.ee.32.5.28057

Authors

Vaida Pilinkienė Kaunas University of Technology, Lithuania
Alina Stundziene Kaunas University of Technology, Lithuania
Evaldas Stankevičius Kaunas University of Technology, Lithuania
Andrius Grybauskas Kaunas University of Technology, Lithuania

DOI:

https://doi.org/10.5755/j01.ee.32.5.28057

Keywords:

economic stimulus, real estate, COVID-19, housing price, economic shock

Abstract

The COVID-19 pandemic caused a number of challenges worldwide regarding not only the human health perspective, but also the economic situation. Quarantine, imposed in many countries, forced a substantial part of businesses to close or narrow down their activities, thus leaving corporations and employees without any or with lower income. If national governments had not undertaken any actions to save national economies, the consequences could have been even more devastating. The real estate market is an important part of economy. Instability in the real estate market can cause financial problems, vulnerability of population’s welfare and other negative effects. This research aims to assess the impact of the economic stimulus measures on the real estate market under the conditions of the COVID-19 pandemic in Lithuania. The research methods include comparative analysis, correlation analysis, stationarity test, regression analysis and the ARDL models. The results indicate that the economic stimulus measures only partially contribute to stabilization of the real estate market in Lithuania. The drop in housing prices was 2.9 percent lower because of the economic stimulus in the second quarter of 2020. Maintenance of household cash and deposits as well as lending to business enterprises are the measures that allow to stabilize the real estate market in the shortest time under the conditions of the economic shock. The other governmental support measures are also important, especially if they are aimed at preserving jobs.

Author Biographies

Vaida Pilinkienė, Kaunas University of Technology, Lithuania

Vaida Pilinkiene is Professor and Director of the Economics Study Programmes Committee at the School of Economics and Business, Kaunas University of Technology, Lithuania. Her research interests focus on modelling and forecasting economic processes, industry competitiveness, real estate market, sharing economy. ORCID iD 0000-0002-8373-2471.

Alina Stundziene, Kaunas University of Technology, Lithuania

Alina Stundžienė is Associate Professor in Economics at School of Economics and Business, Kaunas University of Technology, Lithuania. Her research interests include economic modelling, prediction, labour economics, real estate market, energy, etc. ORCID iD 0000-0001-6812-8471.

Evaldas Stankevičius, Kaunas University of Technology, Lithuania

Evaldas Stankevičius is a doctor of science in the field of social sciences (economics), a researcher of the research group “Sustainable Economy” of Kaunas University of Technology, School of Economics and Business. Evaldas has experience in various research and study projects. The main areas of scientific interest are state budget tax revenues; research on the impact of economic growth on the social and fiscal spheres of sustainable development.

Andrius Grybauskas, Kaunas University of Technology, Lithuania

Andrius Grybauskas is a Researcher at ERA Chair team, IN4ACT at the School of Economics and Business in Kaunas University of Technology. He received undergraduate degree in economics and finance, graduate degree in International Trade and Economics and a Ph.D. in Economics at Kaunas University of Technology. Andrius research themes mostly revolves around the real estate market and its stability, housing bubbles, econometrics, Big Data, REITs, machine learning, forecasting, Industry 4.0 and artificial intelligence.