The housing loan market is gaining momentum, while supply is dwindling
According to Luminor Bank data, the average amount of newly issued housing loans has increased by 13% over the past two years. Laura Žukovė, Head of Advisory and Portfolio Management at Luminor Group, says that this indicates not only rising prices but also greater confidence in one's financial capabilities.
Žukovė explains:
Lithuanians are borrowing more and more each year to buy homes – falling interest rates, inflation returning to normal levels, rising property prices, and improving incomes have cooled the desire to postpone home-buying decisions. The real estate market is recovering, supply is shrinking, so buyers aren't waiting – many are trying to 'jump on the train' while prices are still within reach.
According to Žukovė, as supply decreases and economic indicators improve – with rising wages and falling base interest rates – property prices are likely to increase more rapidly this year.
Buyers choose quality and long-lasting value
More than half (51%, according to Luminor data) of buyers today prioritise newly built or renovated residential properties. It is determined not only by greater supply and rising average salaries, which allow buyers to take on long-term financial commitments more confidently, but also by a shift in buyers' values. They are increasingly seeking energy efficiency, comfort, a good location, and environmental quality.
Žukovė elaborates further:
The average loan for a three-room apartment in a newly built project often reaches EUR 180,000. This choice is driven by the desire to make an investment that retains its value. New developments usually offer additional benefits, such as parking spaces, landscaped surroundings, and shared common areas. These conveniences increase the appeal of such properties.
Investing in the future: waiting a year for a good home, choosing more spacious apartments
The trend of investing in improving real estate infrastructure is also being noticed in Kaunas by Viktorija Pozingytė, Head of Commerce & Community of the Nemunaičiai quarter developed by SBA Urban. She notes that modern buyers increasingly value not just the property itself but also the surrounding environment in which they invest. It is clearly reflected in the sales results of the residential building Pasaka, currently under construction in the quarter, where over 60% of the apartments have been sold even before construction is complete.
Pozingytė states that buyers understand that as the quarter's infrastructure continues to expand and the environment and availability of services improve, the value of their purchased property will also increase. Projects developed in such exclusive locations in the city centre are still uncommon in Kaunas, so buyers are willing to wait a year or more for their residential property.
In addition, Pozingytė also notes that demand for larger dwellings has increased noticeably over the past year:
A few years ago, smaller apartments up to 65 sqm were more commonly sought. Still, young families increasingly look for more spacious residential properties – ranging from 70 to 155 sqm – with direct views of the Nemunas River. It shows that people are more confidently choosing not only larger but also higher-quality homes, which is directly linked to improving economic opportunities for Lithuanians and more appealing mortgage conditions.
The priority of today's buyer is diversification of investments and finances
Real estate market experts agree that today's buyers are more interested in market trends, calculate long-term returns, and are no longer rushing to spend all their savings on a single property. Purchasing residential property with a loan is no longer seen solely as a place to live, but also as a means of financial security.
According to Žukovė, an expert at Luminor Bank, the financial leverage provided by a mortgage allows buyers not only to purchase a property but also to invest part of their funds in other instruments — such as bonds, funds, or other real estate assets:
The decision to buy a home today is increasingly less of an emotional step. Most people plan it responsibly – considering not only the property's location or type but also its long-term value. It reflects a more mature approach to borrowing: a mortgage is no longer a necessity but a responsible investment in the future.
Pozingytė, Head of Commerce & Community of the Nemunaičiai quarter developed by SBA Urban, concludes:
Previously, many buyers viewed a residential property as a temporary stop—a place to live for a few years before looking for something better. Now the situation is changing: seeing the project's potential, improving infrastructure, the limited supply of quality housing in the city centre, and favourable financing conditions, buyers are daring to choose a home they would like to settle in for the long term. A home becomes a considered investment in their future, rather than just a short-term decision.