The Smallest Number of Unsold Apartments in Vilnius Since 2014

In Q2 2016, activity in the housing market retained its momentum with little likelihood of slowing down. The house and apartment purchase-sale transactions outnumbered not only those concluded in Q1 2016, but were also more numerous on a year-on-year basis. According to the data of the State Enterprise Centre of Registers, in Q2 2016, Lithuanians concluded 19% more transactions in apartments, and nearly 7% more transactions in purchase and sale of houses than in Q2 2015. During Q2 2016, on average, 890 deals in the purchase-sale of houses, and 2,840 transactions in apartments were concluded in Lithuania per month. As reported in the Ober-Haus Q2 2016 residential market overview, the largest number of transactions of purchase-sale of houses and apartments were recorded last May, and house sales indicators were the highest since 2007.

Q2 2016 was also distinguished for rapidly growing apartment prices. Unlike previous periods the increasing prices were not just recorded in Vilnius but also in all major Lithuanian cities. The most rapid increase in prices during this April, May and June was recorded in Šiauliai, where on average prices rose by 2.5% (up to 585 EUR/sqm). During the same period prices in Vilnius increased by 2.4% (to 1,376 EUR/sqm), Kaunas – 2.1% (to 970 EUR/sqm), Panevėžys – 1.8% (to 547 EUR/sqm), and Klaipėda – 1.2% (to 1,002 EUR/sqm) respectively. Despite the negative demographic trends in the country (according to Statistics Lithuania, during 2015 the population was increasing only in Vilnius city, Kaunas district, Klaipėda district, Palanga city and Neringa municipalities), an accelerated price increases were also outside the capital. The continuing favourable economic conditions – growth in employment rates and wages, as well as record-low interest rates boosted the housing market despite the overall decrease of the national population.

According to Ober-Haus, among the five major cities the most prominent leap in the number of apartment sale transactions during Q2 was recorded in Vilnius (up by 25% as compared to Q1 2016). A major contributor to the trend was also the rapidly growing segment of newly constructed apartments. According to the data of Ober-Haus, during Q2 2016 in the five major cities of Lithuania 1,395 newly constructed apartments were purchased or booked directly from construction companies in apartment blocks under construction or those already completed. This represents an increase of 3% as compared to Q1 2016, and a leap of 45% from the data of Q2 2015.

Record new heights were again reported in the volume of apartment sale deals in the capital. During Q2, 1,154 newly constructed apartments were sold in Vilnius in apartment blocks already completed or still under construction; this was 3% more than realised during Q1, and a jump of 42% on a year-on-year basis. The largest contributor to the new apartment sale indicators was the most recent projects – as many as 69% of all apartment sales fell within the projects complete in 2016–2017. 22% of the apartments sold during Q2 were constructed in 2015, and only 9% were sold in multi-apartment houses constructed in 2007-2014. “The most recent apartment house projects provide the broadest options for purchasers, and although the number of unsold apartments in the projects of earlier years (although fully completed) is limited, they attract much less attention,” Saulius Vagonis, Head of Valuation & Analysis at Ober-Haus, said.

The sales of middle class new apartments continue to be the dominant trends in Vilnius, and the prices of such apartments with a partial finish most often range from 1,450 to 1,900 EUR/sqm. Of all the newly constructed apartments sold during Q2 in Vilnius, 49% were middle-class apartments, while 38% and 13% of all apartments were economy and prestigious class respectively. “Recent years have seen developers tending to target not only the lowest-cost housing segments, but also higher class projects. Proximity to the centre of the city, better energy efficiency solutions, and prices below 2,000 EUR/sqm – these are the prevailing attributes for the multi-apartment houses currently under construction in the capital,” Mr. Vagonis noted.

Similarly, Kaunas and Klaipėda are showing slightly enhanced activity in the construction of multi-apartment houses. Although the majority of the projects being developed are of limited scope (on average, 25-35 apartments in an apartment building), increasingly different types of projects are being introduced to the market in different areas of the cities. According to Ober-Haus, in Kaunas, during Q2 2016, a total 141 apartments were sold or booked in the primary market, which is by 6% more than in Q1. Within the same period, 87 new apartments were sold or reserved in Klaipėda, i.e. an increase of 9% from Q1 2016.

The high apartment sales indicators caused a further decrease in the number of unsold newly constructed apartments in all cities throughout the country. At the end of Q2 2016, there were 1,922 unsold apartments in already completed new projects in major Lithuanian cities, i.e. by 14% less than at the end of Q1 2016. Despite the extremely rapid increase in the volumes of new construction in the capital, the number of unsold new apartments in completed buildings has notably decreased. In Vilnius, there were 1,063 unsold apartments in completed construction projects, i.e. 21% less than at the end of Q1 2016.

Currently the total number of unsold apartments in Vilnius is the smallest since Q3 2014, and has been decreasing for the second quarter in a row. The number of unsold apartments of the other cities is also declining, i.e. late in Q2 2016, there were 277 apartments in Kaunas, 554 apartments in Klaipėda, and 28 new construction apartments in Šiauliai. The improved demand for housing, and the decreasing numbers of unsold apartments have encouraged developers to launch new projects not only in Vilnius, Kaunas, Klaipėda or the health resort areas, but also in smaller cities – Šiauliai and Panevėžys.

Full review (PDF): Lithuania Residential Market Commentary Q2 2016

In Q2 2016, activity in the housing market retained its momentum with little likelihood of slowing down. The house and apartment purchase-sale transactions outnumbered not only those concluded in Q1 2016, but were also more numerous on a year-on-year basis. According to the data of the State Enterprise Centre of Registers, in Q2 2016, Lithuanians concluded 19% more transactions in apartments, and nearly 7% more transactions in purchase and sale of houses than in Q2 2015. During Q2 2016, on average, 890 deals in the purchase-sale of houses, and 2,840 transactions in apartments were concluded in Lithuania per month. As reported in the Ober-Haus Q2 2016 residential market overview, the largest number of transactions of purchase-sale of houses and apartments were recorded last May, and house sales indicators were the highest since 2007.

Q2 2016 was also distinguished for rapidly growing apartment prices. Unlike previous periods the increasing prices were not just recorded in Vilnius but also in all major Lithuanian cities. The most rapid increase in prices during this April, May and June was recorded in Šiauliai, where on average prices rose by 2.5% (up to 585 EUR/sqm). During the same period prices in Vilnius increased by 2.4% (to 1,376 EUR/sqm), Kaunas – 2.1% (to 970 EUR/sqm), Panevėžys – 1.8% (to 547 EUR/sqm), and Klaipėda – 1.2% (to 1,002 EUR/sqm) respectively. Despite the negative demographic trends in the country (according to Statistics Lithuania, during 2015 the population was increasing only in Vilnius city, Kaunas district, Klaipėda district, Palanga city and Neringa municipalities), an accelerated price increases were also outside the capital. The continuing favourable economic conditions – growth in employment rates and wages, as well as record-low interest rates boosted the housing market despite the overall decrease of the national population.

According to Ober-Haus, among the five major cities the most prominent leap in the number of apartment sale transactions during Q2 was recorded in Vilnius (up by 25% as compared to Q1 2016). A major contributor to the trend was also the rapidly growing segment of newly constructed apartments. According to the data of Ober-Haus, during Q2 2016 in the five major cities of Lithuania 1,395 newly constructed apartments were purchased or booked directly from construction companies in apartment blocks under construction or those already completed. This represents an increase of 3% as compared to Q1 2016, and a leap of 45% from the data of Q2 2015.

Record new heights were again reported in the volume of apartment sale deals in the capital. During Q2, 1,154 newly constructed apartments were sold in Vilnius in apartment blocks already completed or still under construction; this was 3% more than realised during Q1, and a jump of 42% on a year-on-year basis. The largest contributor to the new apartment sale indicators was the most recent projects – as many as 69% of all apartment sales fell within the projects complete in 2016–2017. 22% of the apartments sold during Q2 were constructed in 2015, and only 9% were sold in multi-apartment houses constructed in 2007-2014. “The most recent apartment house projects provide the broadest options for purchasers, and although the number of unsold apartments in the projects of earlier years (although fully completed) is limited, they attract much less attention,” Saulius Vagonis, Head of Valuation & Analysis at Ober-Haus, said.

The sales of middle class new apartments continue to be the dominant trends in Vilnius, and the prices of such apartments with a partial finish most often range from 1,450 to 1,900 EUR/sqm. Of all the newly constructed apartments sold during Q2 in Vilnius, 49% were middle-class apartments, while 38% and 13% of all apartments were economy and prestigious class respectively. “Recent years have seen developers tending to target not only the lowest-cost housing segments, but also higher class projects. Proximity to the centre of the city, better energy efficiency solutions, and prices below 2,000 EUR/sqm – these are the prevailing attributes for the multi-apartment houses currently under construction in the capital,” Mr. Vagonis noted.

Similarly, Kaunas and Klaipėda are showing slightly enhanced activity in the construction of multi-apartment houses. Although the majority of the projects being developed are of limited scope (on average, 25-35 apartments in an apartment building), increasingly different types of projects are being introduced to the market in different areas of the cities. According to Ober-Haus, in Kaunas, during Q2 2016, a total 141 apartments were sold or booked in the primary market, which is by 6% more than in Q1. Within the same period, 87 new apartments were sold or reserved in Klaipėda, i.e. an increase of 9% from Q1 2016.

The high apartment sales indicators caused a further decrease in the number of unsold newly constructed apartments in all cities throughout the country. At the end of Q2 2016, there were 1,922 unsold apartments in already completed new projects in major Lithuanian cities, i.e. by 14% less than at the end of Q1 2016. Despite the extremely rapid increase in the volumes of new construction in the capital, the number of unsold new apartments in completed buildings has notably decreased. In Vilnius, there were 1,063 unsold apartments in completed construction projects, i.e. 21% less than at the end of Q1 2016.

Currently the total number of unsold apartments in Vilnius is the smallest since Q3 2014, and has been decreasing for the second quarter in a row. The number of unsold apartments of the other cities is also declining, i.e. late in Q2 2016, there were 277 apartments in Kaunas, 554 apartments in Klaipėda, and 28 new construction apartments in Šiauliai. The improved demand for housing, and the decreasing numbers of unsold apartments have encouraged developers to launch new projects not only in Vilnius, Kaunas, Klaipėda or the health resort areas, but also in smaller cities – Šiauliai and Panevėžys.

Full review (PDF): Lithuania Residential Market Commentary Q2 2016