In the primary market of Vilnius, 251 preliminary purchases of new dwellings (apartments and terraced houses) were concluded last month. This is 2.7% less than in January (258) but 10% more than a year ago (228) and slightly higher than last year’s monthly average of around 225 monthly transactions.
Šarūnas Tarutis, Head of Investment and Analysis at Citus, a company of creative real estate projects’ development and placemaking, commented: ‘The Citus team of analysts, forecasting the dynamics of the housing market and analysing more than a decade of market data, identified that the Euribor rate and housing demand are very closely linked, with an almost absolute correlation. It is, therefore, not surprising that with a fairly stable Euribor, market activity remains at a similar level. On the other hand, we can see that the European Central Bank has been making more pronounced changes to the Euribor once a quarter, and Euribor has been stable since the beginning of December. Forecasting ECB decisions is very difficult, but I am cautiously expecting a reduction in the Euribor of 0.2–0.25 percentage points for the next three months. It would be a positive sign, especially as the urban consumer confidence index rose further in February, reaching a score of 4. It hasn’t been this high since the summer of 2021, and its growth seems to be a trend’.
During the month, the capital saw a surge in supply, with 446 apartments in one new project and two stages of previously launched projects. The supply of terraced houses in the capital decreased slightly as there were no new projects. Citus analysts say they have not seen such a sharp increase in supply for a long time. However, the total housing stock grew less significantly, rising from 4,418 to 4,789 units over the month, representing an 8.4% increase. A year ago, Vilnius residents could choose from 4,329 dwellings (10.6% growth).
Tarutis: ‘One project in Vilnius was unexpectedly large – about 230 apartments at one go. We are used to seeing smaller projects or stages. Even without this project, the increase in supply is quite significant, but I see this as an exception rather than a trend. Attention should also be paid to the quality of supply. Citus estimates that almost 950 dwellings in the capital can be considered illiquid: they do not find their owners for two years or more. This statistic excludes projects that have been temporarily suspended and then reopened. Such homes will likely continue to fail to attract buyers, so the real supply is about 20% lower’.
The average prices per square metre of apartments in Vilnius have changed only slightly, by 1.25% per month: at the end of January, a new apartment was sold for EUR 3,352 per square metre, and at the end of February, for EUR 3,394. The price has also changed little over the year: at the end of February 2023, it was EUR 3,319/sqm, i.e. an increase of 2.26% over 12 months.
‘Looking at the pancake-like changes in the requirements baked by the authorities, there may be temporary stability. The new version of the Technical Regulation on Construction was approved a couple of days ago, which defines that, in fact, all buildings taller than five storeys will have to have emergency shelters, which can increase the price of a project by at least 3−5%. Let’s add the new requirements adopted in the last two years, which will only have an impact this year and next year, and we can expect at least a 10% increase in housing prices due to these changes alone,’ Tarutis added.
In January, 14 transactions were concluded in Citus projects, slightly more than a year ago: 9 transactions were concluded in Vilnius, 2 in Kaunas and 3 in Druskininkai in the project Nemunas by CITUS. In January, 20 deals were concluded. The company’s portfolio in Vilnius currently consists of 68 apartments. The first stage of the project, Mūnai by CITUS, will be launched in the capital soon. In Kaunas, only four lofts and six commercial premises are left in the first stage of the Radio City by CITUS project, and in Druskininkai there are 72 apartments and the last 2 commercial premises.
The situation in Kaunas was more contrasting: 69 sales were recorded in February, a slower result than in January (111) but similar to the previous year (63).
One project supplemented the supply, bringing 21 apartments to the market. However, the total number of units fell by 2.3%, from 896 units in January to 873 units in February.
Prices in Lithuania’s second largest city remained stable, with a minimal correction: the price of apartments on offer here changed from EUR 2,610 to EUR 2,596 per sqm in the month (−0.5% change). Over 12 months, it has also changed minimally, from EUR 2,615/sqm a year ago (−0.7% change).
In Klaipėda, demand in February increased compared to the first month of the year, with 11 new home purchases, up from 6 in January.
During the month, the total choice of new homes for city dwellers decreased by the same 11 units, from 538 to 527, as there were no new projects. However, the total housing stock increased by 62% over the year to 325 units at the same time last year.
Prices in Klaipėda also remained stable: in January they amounted to EUR 2,224/sqm, in February by 0.45% more, at EUR 2,234/sqm. Over the year, the price of the apartment supply increased by 8.6%. In February last year, the average price in the primary market was EUR 2,057/sqm.
