Eglė Savostė, Head of the Analysis Department at Citus:
Last month, buyers of economy-class housing were somewhat more active in Vilnius, purchasing 57% of all homes sold during the month (36% were medium-class and 8% were premium-class). As a result, the supply of this class of housing has decreased slightly, which has been the subject of much discussion recently due to the risk of a decline.
According to Savostė, in May there were significantly fewer new offers on the primary market in the capital than usual: only 140 flats were put on the market during the month, although the monthly average for new supply in the first four months of this year was as high as 716, and last year it was 324 homes.
Currently, buyers in Vilnius can choose from 5,782 new homes, with 51% of these being economy class, 36% medium class and 13% premium class. Over the year, the stock of new homes in the capital increased by 4.5%, but decreased by 4.6% over the month from 6,060 units.
Due to buyer activity, the average prices of homes on offer continued to rise at a fairly rapid pace, increasing by 1.97% over the month to EUR 3,771 per sqm. This growth, since the beginning of the year, has already reached 8.63% and 13.02% over the past year.
May was calmer than April in the primary markets of Kaunas and Klaipėda: 68 transactions were concluded in Kaunas (109 in April) and 16 in Klaipėda (35 in April), although this year is still significantly more productive than last year. In May last year, demand in Kaunas amounted to 50 dwellings, and in Klaipėda it was 9.
The range of properties in Kaunas has grown by 100 units and now stands at 1,106, representing a 14.6% increase over the year. However, according to the Head of the Analysis Department at Citus, it is still relatively small, which is why market dynamics in Lithuania’s second-largest city are slower. However, a substantial proportion of the housing stock in Kaunas – as much as 22% – is made up of prestigious properties, which is likely to lead to a shortage of medium-range properties (24%).
Price growth here also remains fairly rapid: in May, prices stood at EUR 2,972 per sqm, increasing by 2.89% over the month and 13.42% over the year.
No new homes were put up for sale in Klaipėda in May, so the housing supply shrank by 2.3% to 558 units. Although Citus analysts have recorded a 14% increase in supply since the beginning of the year, the choice available to buyers has decreased by the same 2.3% over the past twelve months.
The average prices of homes on the primary market are still strongly influenced by the particularly luxurious new supply that appeared a few months ago. At the end of May, the price per sqm of housing reached EUR 3,223, rising by 0.43% over the month.
Citus concluded a total of 41 transactions across Lithuania in May. The best result was recorded by the apartment complex Nemunas by CITUS in Druskininkai, where 16 units were sold. In Vilnius, 25 more flats found new owners in the projects Mūnai by CITUS, Kaip Niujorke by CITUS, Ežero Takais by CITUS and Senamiesčio Link by CITUS.
Citus currently offers 162 flats in the capital, 133 units in Druskininkai and 10 units in Neringa as part of the Nidos Bangos by CITUS project.
Changes in housing affordability in the first quarter
Savostė continues:
The rise in housing prices is currently being somewhat offset by the decline in Euribor, which has been ongoing for some time now, and this is good news. Also, Revolut Bank’s entry into the housing loan market, although no active steps have been taken yet, could have a positive impact on buyers’ ability to borrow and purchase housing.
However, according to data from Citus analysts**, the housing affordability index (CITHAI) in Vilnius and Klaipėda fell slightly in the first quarter: a person earning an average salary and buying a home with a loan (CITHAI I) could afford 36.62 sqm in Vilnius in the first quarter and 43.26 sqm in Klaipėda, even after eliminating the statistical price surge in February. A couple buying a home (CITHAI II) under the same circumstances would be able to purchase 69.57 sqm in Vilnius and 82.19 sqm in Klaipėda.
These indicators were 0.53% and 0.99% lower than in the fourth quarter of 2024 but 20.08% and 18.43% higher than a year earlier.
Savostė advises against dramatizing the situation. She predicts:
On the one hand, in December, when calculating the last quarterly CITHAI indices for the previous year, there was a noticeable increase in wages due to bonuses, dividends and similar payments made at the end of the year, while Euribor continued to decline. So, for the coming quarters, given the continuing wage growth, even with faster growth in housing prices, affordability should gradually improve.
In Kaunas, meanwhile, affordability continued to improve: the CITHAI I index reached 39.62 sqm, while the CITHAI II index reached 75.28 sqm. This was 0.94% more than in the previous quarter and 17.78% more than a year ago.
Currently, 6-month Euribor interest rate the most relevant for homebuyers is 2.069%. Due to the European Central Bank’s continued interest rate reduction policy, these rates are expected to reach 1.5% by the end of the year.
*When assessing primary housing market demand, Citus analysts count preliminary transactions for the purchase of flats and terraced houses. Terraced houses are included in this figure because, formally, most terraced houses are classified as flats and are relevant to home buyers. Additionally, preliminary contracts that are cancelled during the current month are excluded from the results, as they are typically related to deals made earlier and don’t reflect the demand for the current month. Sometimes, sales results increase due to the simultaneous recording of sales from previous months, resulting in an apparent increase in a given month. However, larger ‘lumps’ are recorded, and the data is constantly updated, so discrepancies are levelled out over a more extended period.
**Wage statistics provided by government institutions, which influence the CITHAI affordability index calculated by Citus analysts, are published after a delay.