Housing price increase is gaining momentum

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 1.9% in March 2021 (0.9% increase was recorded in February 2021). The annual apartment price growth in the major cities of Lithuania was 7.2% (the annual apartment price growth in February 2021 was 5.3%).

In March 2021 apartment prices in the capital grew 2.2% with the average price per square meter reaching EUR 1,766 (+38 EUR/sqm). Apartment prices in Kaunas, Klaipėda, Šiauliai and Panevėžys in March grew by 1.2%, 1.6%, 2.7% and 2.4% respectively with the average price per square meter reaching EUR 1,224 (+15 EUR/sqm), EUR 1,211 (+19 Eur/sqm), 831 (+22 EUR/sqm) and EUR 813 (+19 EUR/sqm).

In the past 12 months, the prices of apartments grew in all major cities: 7.8% in Vilnius, 4.9% in Kaunas, 6.2% in Klaipėda, 10.4% in Šiauliai and 10.5% in Panevėžys.

“At the end of 2020/start of 2021, it seemed that after a sluggish period in mid-2020, we saw an instantaneous sales price rise, yet the performance in March 2021 shows that the price increase is accelerating. Looking at historical data, the monthly almost 2% increase in apartment prices is exceptional, because the last time such a monthly increase was recorded in the country’s cities only in 2007. The relatively high overall price change in March was due to the faster rise in prices in all major cities across various apartment segments.

This year we can see a faster increase in apartment prices in the segment of new housing. For example, in Q1 2021 the prices of older apartments in Vilnius, Kaunas and Klaipėda increased by 2.7–3.8% and the prices of new apartments in these cities increased by 3.7–4.9%. Every day, we witness rapid increase in the expectations of sellers and how the increasing prices of apartments still attract buyers. In particular, this is obvious in the new apartment segment, where there is a supply shortage at the moment and developers are sometimes unable to respond to the changing market situation. As a result, buyers looking for new homes in Vilnius face challenges. Due to the lack of apartments in already completed projects, they are forced to choose apartments in the planned projects or projects that have recently started.

The rising apartment prices in the cities are not exclusive to Lithuania. Similar trends can be observed across Europe. According to Eurostat, in Q4 2020, a total annual increase of 5.7% in home sales prices was recorded in 27 EU countries, which is the fastest increase since 2007.

This year’s record-breaking transactions for the acquisition of new homes in the capital city give reason to predict even faster increase in home prices later when the transactions are finalized and official statistics will record impressive amounts of cash. Thus, looking at the current situation in the European and Lithuanian housing market, it seems that the price increase is gaining momentum,” Raimondas Reginis, Research Manager for the Baltics at Ober-Haus, said.

Full review (PDF): Lithuanian Apartment Price Index, March 2021

Latest news

All news
Ober-Haus Celebrates 25 Years: How Has the Property Market Changed in a Quarter of a Century?

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

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

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

This website uses cookies. You can confirm your acceptance by clicking the "I Agree" button or by continuing to browse. I agree

Mail sent!

This site is registered on wpml.org as a development site.