This post was automatically translated into English
June and July were marked by an unusual abundance of new housing supply in Kaunas.
June and July were marked by an unusually high supply of new housing in Kaunas. In these two months alone, real estate development companies started selling seven new residential projects here, with a total number of 381 apartments.
Compared to May and June, the supply of new housing increased by 61.4 percent, and compared to July last year – by 30 percent.
“The supply and demand ratio, which shows how many apartments a buyer could choose from when purchasing a home, increased from 2.81 apartments to 4.23 apartments between April and May, which is a significant change in a city where there has been little new construction or purchase of housing,” says Matas Macijauskas, a market analyst at a real estate development company.
Meanwhile, housing demand in June and July fell by ten percent compared to April and May (only 189 apartments were purchased during these two months).
However, this two-month decline is most likely a temporary phenomenon, not indicating a slowdown in the entire Kaunas market. Compared to the same period last year, it can be seen that almost four times more apartments were sold and reserved for purchase in Kaunas. In June and July 2006, only 36 apartments were purchased in the entire city of Kaunas.
“In the temporary capital, there are gradually more and more projects that, based on the price per square meter, could be classified as medium (from LTL 6,500 per sq m) or prestigious (from LTL 7,500 per sq m) class.”
“Real estate developers apparently hope that Kaunas residents will start to appreciate and buy more expensive housing. Four out of twenty-one residential housing projects currently on the market are classified as middle-class and even three are prestigious. At the beginning of the year, almost only economy-class, cheap housing was offered here,” says M. Macijauskas.
In the primary market in Kaunas (where residential housing is sold by real estate development companies themselves), the weighted average price per square meter of new apartments increased by 4.1 percent (to 6,002 LTL per sq m), but this increase was largely due to the appearance of more expensive objects on the market and the disappearance of cheaper apartments from the supply.
In Kaunas, prices for apartments for sale have only been raised by a few developers who are finishing selling out their projects over the past two months. However, comparing today’s prices with July 2006, it is clear that the average price in the temporary capital has risen by a full 20 percent over the year.
According to M. Macijauskas, a significant increase in the prices of newly built apartments in Kaunas should not be expected in the near future, as they will be limited for some time by the unusually large supply of residential housing.