Citus Head of Analysis, Eglė Savostė:
Buyer activity in the Vilnius market is slowly settling down, and we should see similar situation in the near future. At the moment, the market is quite stable in terms of supply and demand, but to prevent prices from rising more sharply, the supply would still have to fill up.
According to Savostė, in the first three months of this year, the supply of new projects was twice as fast as last year (average 699 vs. 324 dwellings per month); however, the current range of new projects would take 9.5 months to sell out based on the current rate of sales; and only 7.7 months considering 20% of estimated illiquid supply. The current stock of new dwellings in Vilnius consists of 5,711 apartments and terraced houses –1.5% less than in February, 7% more than at the beginning of the year and 18% more than a year ago. During the month, it increased by 427 units.
Meanwhile, according to Citus data, the average price of apartments in the capital reached EUR 3,652 per sqm and grew by 2.76% in a month, 5.18% in a quarter, and 8.01% over 12 months.
Savostė continues:
We can see that the scales of market power in Vilnius are slowly tipping towards the sellers again. Such demand is sufficiently comfortable for them, and prices in some projects have increased by 3–5% per month. In the current circumstances, this is a fairly organic growth, which does not lead to significant changes in affordability. Still, if there are doubts about the further long-term decline of Euribor, it may eventually start to influence the buyers’ decisions.
In Kaunas, the average prices of apartments on offer increased by 1.66% to EUR 2,872 in the quarter (−0.35% correction in March), while over the year, they grew by a similar amount as in the capital city – 8.38%. Moreover, demand was much higher than usual: March was marked by 176 transactions, while 429 transactions were concluded during the quarter – 122% more than in the previous quarter and 81% more than in the quarter a year ago, according to the preliminary statistics monitored by Citus analysts.
Savostė comments:
Such a result is rare. In 2023–2024, demand in Kaunas exceeded the 100-transactions-per-month threshold only once per year. In 2022, there were also just two such months. But this year, it’s already the third consecutive month, and the monthly sales average has approached 150, surpassing not only the averages of the past three years but also that of 2021 – the period of the greatest housing market growth.
Nevertheless, she notes that Kaunas continues to face a supply shortage: supply contracted by 8.5% in a month, growing by 9.5% in a quarter and by 26% in a year. However, the current range of 1,077 new dwellings would last 7.5 months at the current sales rate and only half a year if you exclude the 20% illiquid supply.
Savostė:
It’s good that the Kaunas market is quite shallow, and sellers are not inclined to raise prices significantly. However, there’s also no rush to release new housing into the supply – in March, there were 62 new units (509 so far this year). This benefits earlier started projects, which are sweeping up the sales.
In Klaipėda, the results continue to fluctuate, although activity is higher there this year. In March, 48 preliminary transactions for the purchase of new dwellings (apartments, lofts and terraced houses) were concluded in the primary housing market, while in the quarter, 148 were concluded: 96% more than in the previous quarter and even five times (517%) more than in Q1 2024.
Savostė elaborates:
We only recorded better results in 2021 – in the first and last quarters. And let’s look at the average velocity. The average for the first three months of this year is well ahead of the monthly sales velocity for 2022–2024 of 23–28 transactions/month and slightly ahead of the average for 2021 (43 transactions/month). Thus, so far, we can see that the buyer activity in the housing market of the port city of Klaipėda has also increased.
Regarding new supply, the past month in Klaipėda was again empty, so the overall assortment shrank by 8.6 in March. However, over the quarter, due to a substantial replenishment in February, it remains 4.3% higher than at the start of the year. Currently, Klaipėda residents can choose from 511 homes – a similar number to a year ago (514).
Still, according to Savostė, although this supply is small, it is in a slightly better position relative to demand than in the other two major cities: this supply would last almost 10.5 months, and when accounting for illiquid supply – 8.3 months.
In conclusion, Eglė Savostė emphasised that tracking price changes in Klaipėda is currently confusing, as the supply in February was boosted by two costly projects, which inflated the statistical prices:
If we look at the average price of the entire supply of apartments, it is currently as high as EUR 3,108/sqm. And although statistically, it has decreased by 4.69% in a month from EUR 3,261/sqm, if we exclude the two high-priced projects, the price would be EUR 2,386/sqm, which is higher than it was in February when it was at EUR 2,330/sqm.
*Citus analysts calculate preliminary transactions for purchasing apartments and terraced houses to assess the demand in the primary housing market. Terraced houses are included in this figure because, technically, most terraced houses are classified as apartments and are relevant for homebuyers. Also, the current month’s result does not exclude cancellations of market-preliminary contracts, which are usually related to previously concluded transactions and, therefore, do not reflect the current month’s demand. The sales result is sometimes inflated by aggregating previous months’ sales in specific projects to record the inflated sales in a given month. However, larger clusters are recorded, and the data are continuously updated so that the discrepancies even out in the longer term.