Apartment prices will most probably grow faster than wages
The Ober-Haus Lithuanian apartment price index (OHBI), which records changes in apartment prices in the five major Lithuanian cities (Vilnius, Kaunas, Klaipėda, Šiauliai and Panevėžys), increased by 1.4% in April 2021 (1.9% increase was recorded in March 2020). The annual apartment price growth in the major cities of Lithuania was 8.6% (the annual apartment price growth in March 2020 was 7.2%).
In April 2021 apartment prices in the capital grew 1.3% with the average price per square meter reaching EUR 1,790 (+24 EUR/sqm). Apartment prices in Kaunas, Klaipėda, Šiauliai and Panevėžys grew by 1.7%, 1.4%, 0.7% and 1.7% respectively with the average price per square meter reaching EUR 1,244 (+20 EUR/sqm), EUR 1,228 (+17 Eur/sqm), EUR 837 (+6 EUR/sqm) and EUR 827 (+14 EUR/sqm).
In the past 12 months, the prices of apartments grew in all major cities: 9.2% in Vilnius, 6.5% in Kaunas, 7.7% in Klaipėda, 11.3% in Šiauliai and 12.0% in Panevėžys.
“The housing market in Lithuania has continued to grow over the last six months. The demand for housing has allowed vendors to sell for higher prices. According to the data of the SE Centre of Registers, in April 2021, over 3,600 apartments were sold in Lithuania, one of the highest numbers ever. Given the structure of the number of apartment transactions across the country, we can see that the market is active in all segments. While there has been a record number of purchase transactions in the new apartment segment, it is also clear from registered transactions that there has likewise been increasing sales of older construction flats throughout the country.
This increasing demand for apartments in all segments is determining the sales prices for both new and older apartments. Based on the figures for the first four months of this year, it can be assumed that prices this year will be exceptional. If this increase in prices continues, apartment prices will grow at a faster rate than wages. According to the latest forecast of SEB bank, the average wage should grow by 7.5% in 2021. Meanwhile, the increasing apartment prices might well exceed the forecasts for wage growth, possibly by more than 10%. For those on higher incomes or purchasers whose income is likely to grow, the rising apartment prices do not deter them from purchasing an apartment, as their current financial situation or their potential future financial situation allows them to compensate for the faster growth of apartment prices. However, this is bad news for purchasers whose income level and its growth potential is smaller. The faster the flat prices grow, the smaller the choice of housing they will have,” Raimondas Reginis, Research Manager for the Baltics at Ober-Haus, said.
Full review (PDF): Lithuanian Apartment Price Index, April 2021
Latest news
All news
Ober-Haus Celebrates 25 Years: How Has the Property Market Changed in a Quarter of a Century?
In 1998, the Lithuanian real estate market was characterised by a lack of housing, poor credit conditions and an underdeveloped commercial real estate sector. Over the last 25 years, the number of apartments for sale has increased more than 10-fold, housing market activity has almost quadrupled, lending rates have fallen from double to single digits, and modern office buildings and shopping malls are now numbering in the hundreds – that’s the picture according to the Ober-Haus Real Estate Market Review 1998–2023, conducted to celebrate the company’s 25th anniversary. The Year 2000 Marked the Beginning of the Creation of the Lithuanian Real Estate Market The years 1998–2000 can be considered as the period when the real estate sector in Lithuania began to evolve. Due to the absence of credit services, the Lithuanian population was mostly only able to purchase a home using their own funds, and commercial construction with the intention to sell or lease was in its infancy. And so, 25 years ago, investors were developing single apartment blocks, business/office assets and shopping centres, where any new development for sale or rent was regarded as a significant event in the real estate market. The Russian economic crisis, which began in…
Buyers Show No Interest in Overpriced Housing
The Ober-Haus Apartment Price Index for Lithuania (OHBI), which captures changes in apartment prices in the five largest Lithuanian cities (Vilnius, Kaunas, Klaipėda, Šiauliai and Panevėžys), remained unchanged in September 2023 (August 2023 figures had shown 0.4% growth). The overall level of apartment prices in Lithuania’s major cities grew by 2.6% over the last 12 months (an annual growth of 4.9% in August 2023). In September 2023, Klaipėda, Šiauliai and Panevėžys recorded 0.2%, 0.3% and 0.4% growth respectively, and the average price per square metre rose to EUR 1,613 (+3 €/m²), EUR 1,103 (+3 €/m²) and EUR 1,078 (+4 €/m²). Meanwhile, in Vilnius and Kaunas, the average price per square metre decreased by 0.1% month-on-month to 2.568 Eur (-3 €/m²) and 1.724 Eur (-2 €/m²) respectively. Over the year (September 2023 as compared to September 2022), apartment prices grew in all major cities of the country: in Vilnius – by 2.6%, in Kaunas – by 3.2%, in Klaipėda – by 1.6%, in Šiauliai – by 3.7%, and in Panevėžys – by 2.5%. The stagnation period in the Lithuanian housing market continues. Although the market activity indicators do not show any signs of improvement, the majority of home sellers have not…
Office sublease: thousands of invisible square metres
In the office segment, the phenomenon of sublease – the transfer of part of a company’s leased premises to a third party – became popular during the pandemic and has remained since. The market of subleased property is usually not included in the official statistics published by real estate agencies. According to OBER-HAUS, current tenants of Class A and Class B+ business centres in Vilnius alone could be offering several thousand or even tens of thousands of square metres of space for sublease. Sublease is usually simply understood as renting space not directly from the owner or manager of a business centre, but from an existing tenant established and operating in the business centre. The principle of sublease itself existed long before the pandemic, but has only become more popular in recent years as businesses switched to remote or hybrid work, consequently, the amount of space required for their operations has decreased. OBER-HAUS estimates that since the beginning of the pandemic, the average office space in Vilnius has decreased by about 30%. In other words, companies entering into new contracts today are renting office space by almost a third smaller than a few years ago. However, office lease contracts are…
All news