Lithuanian Residential Market Commentary Q4 2011
The first half of 2011 saw a positive mood in the Lithuanian housing market. The growing number of sales concluded, an increase in construction, and stable housing prices fuelled this optimism. It is worth noting that there were minor positive changes in prices in Vilnius in early 2011. The second half of the year however, was characterised by more cautious moods and a minor drop in prices. These changes were mostly impacted by the continuing flow of bad news from abroad, the somewhat pessimistic Lithuanian economic development forecasts, and the more stringent mortgage loan policies initiated by the Bank of Lithuania.
The increasing number of sales completed over the last few years has led to a decrease in the number of unsold new apartments on the primary market, and this is the reason behind the increase in new constructions. According to data from Ober-Haus, 737 apartments were constructed in Vilnius last year, a third more than 2010. The construction of 380 apartments in Kaunas over the same period was three times more than in 2010. On the other hand, the construction of apartment buildings in Klaipėda was considerably slower. Considering the supply of new housing (Klaipėda leads in terms of the number of unsold apartments per 1,000 residents), project implementers built only one third the number built in 2010, i.e. only 3 apartment houses with 103 apartments.
Last year, project developers offered apartments with record small areas: in Vilnius, the average area of new apartments was 55 sqm; this number was 56 sqm in Kaunas and 54 sqm in Klaipėda. This decrease in apartment size is significant when we consider that in the 2003–2010 period the average area of new apartments was 60–65 sqm2. This reduction is size was determined by developers offering the market more affordable products, as smaller apartments automatically mean a lower sales price.
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The first half of 2011 saw a positive mood in the Lithuanian housing market. The growing number of sales concluded, an increase in construction, and stable housing prices fuelled this optimism. It is worth noting that there were minor positive changes in prices in Vilnius in early 2011. The second half of the year however, was characterised by more cautious moods and a minor drop in prices. These changes were mostly impacted by the continuing flow of bad news from abroad, the somewhat pessimistic Lithuanian economic development forecasts, and the more stringent mortgage loan policies initiated by the Bank of Lithuania.
The increasing number of sales completed over the last few years has led to a decrease in the number of unsold new apartments on the primary market, and this is the reason behind the increase in new constructions. According to data from Ober-Haus, 737 apartments were constructed in Vilnius last year, a third more than 2010. The construction of 380 apartments in Kaunas over the same period was three times more than in 2010. On the other hand, the construction of apartment buildings in Klaipėda was considerably slower. Considering the supply of new housing (Klaipėda leads in terms of the number of unsold apartments per 1,000 residents), project implementers built only one third the number built in 2010, i.e. only 3 apartment houses with 103 apartments.
Last year, project developers offered apartments with record small areas: in Vilnius, the average area of new apartments was 55 sqm; this number was 56 sqm in Kaunas and 54 sqm in Klaipėda. This decrease in apartment size is significant when we consider that in the 2003–2010 period the average area of new apartments was 60–65 sqm2. This reduction is size was determined by developers offering the market more affordable products, as smaller apartments automatically mean a lower sales price.
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