2024-05-09 13:03:11
We need to understand that inciting threat and imminent danger is part of the hybrid war we’ve been living in for decades, a psychological operation whose impact needs to be countered by education, explanation and reassurance, not by reinforcing that sense of danger. Especially since the real mood of people, based on various studies and data, does not show either fear or confusion.
But it’s worth putting emotions aside and looking at examples of which there are many in the world. And there are even in Europe: for example, the capital of Northern Ireland, Belfast, or the last divided capital in the world, Nicosia, Cyprus.
Belfast has been relatively quiet since the Good Friday Agreement in 1998. However, there is no lack of tension to this day, and sometimes there is unrest related to issues of sovereignty, identity and political unification. However, the city is growing, there is a rather high demand and supply of housing, prices are moderately but constantly increasing.
In Nicosia, the situation is even more acute: the northern part of the city and the entire island is controlled by the Turkish Republic of Northern Cyprus, which is recognized only by Turkey; southern – Greece. Therefore, there is constant tension in the city. But the southern part of the city is vibrant, there are a lot of tourists and foreign investments, so the demand for housing and prices are constantly growing.
Also Kiev, whose situation does not need to be presented and which since 2014 The occupations of Crimea and part of the eastern territories of Ukraine not only felt a direct threat, but there was actually a war going on in the country. However, the capital until 2022 large-scale Russian invasions, it was a rapidly growing city, although the security situation was nowhere near comparable to that of Lithuania. The processes of orientation to the West that started grew the economy, so the demand for housing – along with prices – also went up. There was no shortage of large and ambitious real estate projects in the city, and people were happy to buy them.
Some time ago, perhaps the best examples were mentioned at a business event, even though they are far (geographically) from Lithuania. These are Tel Aviv in Israel and Seoul, the capital of South Korea. Although Tel Aviv is not the capital, I have already seen this city mentioned several times, so let’s stop there and take a closer look.
Tel Aviv: threats in the maelstrom – one of the most expensive cities in the world
Despite the fact that since the establishment of the state of Israel, after World War II, this country has lived in constant confrontation with the Palestinians and other Arab states, Tel Aviv has become one of the most desirable and prestigious cities in the world. It has a high demand for housing, driven by its status as a technology hub and the overall strength of Israel’s economy, high birth rates and immigration. This demand, as well as limited supply, has led to high real estate prices, making Tel Aviv one of the most expensive cities in the region and in Europe. The city’s dynamic economy and cultural appeal also attract significant foreign real estate investment. This further boosted the market despite uncertainty in the region.
The market figures there are impressive: according to data collected by Citus analysts, in 2018 the number of new housing transactions in the Tel Aviv region, which has a population of about 1.5 million. population, amounted to 5,500 per year, and in 2021 jumped even to 13,000. True, in 2022, as in Lithuania, the demand decreased – it shrank by about 40 percent. It is clear that the same global macroeconomic levers are at work here.
Despite the reduced number of transactions, prices in Tel Aviv were stable. And they are also impressive. The highest prices are fixed in 2023. at the end of February, when it reached as much as 17.5 thousand. euros per sq. m! Until then, they have been growing steadily, for the last 12 months. fluctuated at a similar level, and according to the latest available data, in February of this year, it amounted to almost 16 thousand. EUR/sq. m.
The average monthly salary of Tel Aviv residents is about 2,880 EUR before taxes. Vilnius residents, according to the latest data from “Sodra”, earned an average of 2,604 EUR/month in March. before taxes.
From 2021 housing prices in Tel Aviv increased by 38 percent. Analysts of the international Swiss UBS Group estimate that housing prices in the city have tripled in two decades, and this increase was the highest among the 25 largest cities in the world and, according to a study by the financial consulting company Deloitte, in 2022. Tel Aviv was the most expensive city in Europe in terms of housing price per square meter, overtaking Paris. Tel Aviv is said to be in particularly high demand, limited supply, and the cost of construction is also rising here.
Often the figures for Tel Aviv are presented together with the data of the surrounding Central district. Another 2.35 million people live in this region. people. This inflates the numbers, but you can get the impression. Especially since it borders the West Bank, a disputed territory with a lot of unrest, so it is relevant in this context.
in 2023 in the last quarter, compared to the same quarter a year ago, housing transactions in the Central region decreased by 36.1 percent. – “only” 12,250 units were sold. In October, the number of transactions was the lowest in a year, because on October 7, after the terrorist attack, the war started. Sales rebounded in December, with 6,088 homes sold, according to a report from Israel’s finance ministry, albeit down 15 percent. less than in previous years, but already 44.5 percent. more than in November.
The number of housing transactions across Israel continued to grow rapidly in January, a third higher than December’s result or last year’s monthly average. The chief economist of the country’s Ministry of Finance emphasizes that the contraction in transactions was very temporary. In the central region, the number of transactions in January was 62 percent. higher than in January a year ago.
By the way, transactions in unfinished projects (“from drawings”) are rapidly increasing in Israel, especially after the country’s central bank started raising interest rates.
Seoul: less than 40 km to the border of the “prison country” – North Korea
Seoul is one of the most densely populated cities in the world, with a high level of urbanization. It is the economic, political and cultural center of all of South Korea. This has led to a strong demand for housing within the city limits, driven by urban migration, a strong labor market and quality of life. However, Seoul is not only characterized by a high population density, but also geographically bounded by mountains and the Han River, which limits development and puts exceptional pressure on the housing market.
The city of Seoul has a population of about 10 million, and the entire metropolis has a population of 26 million. people. However, the population density of the metropolis is 2,053 people per square kilometer, and the city has 16,000 people. It is true that due to extremely high housing prices, Seoul’s population is shrinking recently – people are moving to neighboring cities and regions, for example, to another city in Gyeonggi Province, Incheon, where housing prices are 64 percent higher. lower ones.
Due to limited supply, high demand and speculative investment, residential real estate prices in Seoul have been high and have continued to rise. For example, according to data available to Citus analysts, a square meter of housing in Seoul cost EUR 7,751.46 in January of this year. In two years, it increased in price by 17 percent; the same 38 percent that Tel Aviv has grown since 2020. January, and since 2016 beginning – as much as 84 percent.
Korean analysts note that both residents and investors who buy housing for rent are only looking at newly built housing because they believe that it will continue to become more expensive. It is also stated that the supply of newly built housing will decrease in the future because, simply, there will be a lack of space to build it.
It is true that finding and analyzing statistics on the South Korean housing market is quite difficult. An interesting example: Koreans do not calculate the price of housing per square meter, but per unit called “pyeong”, which is 3.3 square meters. m.
People in Seoul earn similar to Tel Aviv – about 2,814 EUR/month, “on paper”.
Average per month in Seoul in 2023. more than 5,300 dwellings or about 64 thousand were sold. housing per year. It was about 15 percent. more than in previous years. The most housing in Seoul was sold in 2015 – about 220 thousand. per year (or more than 18 thousand per month).
In South Korea, as in Lithuania, home ownership is perceived as a very important indicator of social stability and success, although housing affordability in this country is one of the worst in the world.
Life flows in its own way: Tel Aviv and Seoul are similar to the big cities of Western Europe, and Lithuania is safe
If we compare with Vilnius, all the mentioned cities are somewhat similar, although, of course, the differences are also huge. But the most important thing is that in them the threats are obvious, but life flows, which strengthens both the economy and the security of the country as a whole: let’s not forget, funds are allocated to the defense of the country from the generated GDP.
Also, these cities – regardless of the existential threat that has existed for decades – are in many ways similar to other, well-known capitals and big cities of European countries, to which we are happy to travel and where we would probably not refuse to live. One could safely mention Berlin, Stockholm, London, Amsterdam, Barcelona. From my perspective, I see very competitive housing markets, huge demand and high prices in these growing cities.
With 73.58 points, Lithuania takes the highest place among neighboring countries in the peace index compiled annually by The Institute for Economics & Peace. Latvia scored 68.87 points, Estonia – 70.28, and Poland – 61.32. World Bank political stability of our country in 2022. rates as high – 79.6 points out of 100. This indicates strong institutional capacity, legal effectiveness and low level of corruption.
We have secured long-term energy independence and ecological transformation. We are well prepared to prevent cyber threats: in the global cyber security index published by The International Telecommunication Union, Lithuania ranks 4th in Europe. We are also constantly strengthening our defense, cyber security and miltech capabilities. This is evidenced by the continuous growth of the Lithuanian defense sector: over the past 5 years, the number of employees has increased by 14 percent, and income by 46 percent.
It is not even worth mentioning that Lithuania is a member of NATO, EU, OECD, WTO and the Schengen Agreement. This shows Lithuania’s commitment to regional stability and cooperation.
We receive a lot of information through various channels and it is important to be selective. I have no doubt that the current security situation in Lithuania in terms of direct military actions is as stable as ever. And it’s only getting better. However, I repeat, hybrid warfare, psychological, destabilization operations are taking place and we must understand this. Our own resistance to panic depends on whether we continue to stay safe, whether we stay calm, live our lives, create prosperity and security.
“Tough times make strong people; strong people make good times; good times build weak people, and weak people create hard times”, – well-known writer G. Michael Hopf aptly described a certain cycle of the development of civilization in his 2016. in the published book “Those Who Remain”.
I believe now is the time to be strong.
2024-05-09 13:03:11