77% more new apartments sold in Vilnius in the first quarter

In the first quarter of 2013, real estate developers in Vilnius sold 500 new apartments, which is 77% more than in the first quarter of 2012 and 34% more than in the last quarter of last year.. “We see the greatest growth – as much as 129%, compared to last year, in the economy class segment,” – calculates Tomas Žiaugra, market analyst at UAB “Eika”. According to preliminary data from the Center of Registers, 1,600 housing sales transactions were concluded in Vilnius during the first three months of this year, which is 5% less than the previous quarter and 19% more than the first quarter of 2012.

“Sales of new apartments in Vilnius are growing much faster than those of old-construction apartments. The faster growth rates indicate that buyers’ attitudes towards the quality of life are changing. The cost of heating an apartment is becoming one of the most important criteria for choosing a home, so more and more buyers are choosing economical new-construction apartments. Vilnius residents are also more active in buying apartments due to extremely low interest rates. Investors are also returning to the market, for whom real estate seems to be a more attractive investment than a bank deposit or other alternatives,” says T. Žiaugra.

In the first quarter of the year, the most buyer interest was attracted by projects managed by four major real estate developers, classified as economy and medium housing classes. During the first three months of the year, the most popular districts were Pilaitė and Pašilaičiai, where cheaper housing dominates, but there was also significant buyer activity in Antakalnis, where the average housing price per square meter is significantly higher.

Real estate developers are currently offering about 2,000 new apartments in Vilnius, of which almost 40% of the supply is in new apartments in apartment buildings that are still under construction. In the middle of last year, the supply of new apartments had reached its highest level since the beginning of 2010 and amounted to almost 2,500 apartments. “Six months ago, the growth rate of supply significantly exceeded the growth in demand – we were considering possible pressure on apartment prices. The current supply corresponds to demand, so market conditions should not affect the price of housing. Although the market is constantly replenished with new apartment building projects, the supply has decreased by 20% to 2,000 apartments in three quarters,” says an analyst at Eika.

During the first three months of 2013, the greatest interest among buyers was shown by economy-class apartments, which accounted for 62% of new apartments sold. The average price of apartments in this class in Vilnius is about 4,100 litas per square meter. During the first quarter, prices in the economy class did not change. About 35% of new apartment sales transactions were in the middle class, where the price of apartments reaches  5,270 litas per square meter. Prices in this class also did not change during the quarter. The remaining, only about 3% of apartments sold, were in luxury housing, the average price of which is about 8,100 litas per square meter. There is an extremely large shortage of supply in this segment, therefore the recorded sales do not reflect the current demand for luxury housing. Currently, there are only 150 luxury new-build apartments in Vilnius. Apartment prices in the prestigious class increased by 2% during the first quarter.

“In the coming quarter, the prices of new construction apartments will remain similar. The supply of new apartments should not grow during this quarter, as new projects that will supplement the market will compensate for the sales that will occur,” predicts T. Žiaugra.

*Compared to the first quarter of 2011.

Founded in 1992, the company “Eika” is one of the largest real estate development and construction groups in Lithuania. The group of companies consists of: UAB “Eika” – a leader in the real estate market, valued for its innovation, reliability and responsibility; UAB “Eikos statyba” – a construction company with extensive experience in the construction and renovation of administrative, public, commercial, industrial and residential buildings.