Record sales of new apartments defy seasonality

Impressive summer sales, which for the first time in recent years did not succumb to seasonality, were capped by a record third quarter of 2013.. During the summer months, sales of new apartments in Vilnius were as much as 42% higher than last year, and according to the Center of Registers, this summer was 31% more active in terms of transactions than last year.

In the third quarter of 2013, real estate developers in Vilnius sold more than 650 apartments, an average of almost 220 apartments per month. Sales of new construction apartments were as much as 58% higher than in the same period in 2012. According to the Center of Registers, in the third quarter of 2013, more than 2,000 apartment sales transactions were concluded in Vilnius, i.e. 34% more than in the same period last year.

Tomas Žiaugra, the development project manager of the real estate company Eika, estimates that the greatest interest from buyers was shown by economy and middle-class apartments, whose sales accounted for 60% and 36% of new apartments sold, respectively. Compared to the same period last year, economy-class apartments were sold twice as much, and middle-class apartments – 27% more. The remaining 4% of apartments sold were luxury housing, whose sales decreased by about 20% compared to the previous year, mainly due to the lack of new projects in this market segment. During the third quarter of 2013, buyers’ interest in new economy-class housing increased the most, whose sales increased by more than 40% over the previous quarter. “The most attractive apartments are snapped up as soon as sales of a newly built house start, regardless of whether it is a new apartment building or the development of a new settlement,” says a representative of the company Eika.

Over the year, the average price per square meter of new apartments in Vilnius increased by 2%, i.e. about 90 litas per square meter and currently stands at 5440 litas. “We cannot say that price increases are a mass phenomenon in today’s new housing market. We notice that some developers, when starting sales of new apartment buildings, offer them slightly more expensively than in previous stages or in nearby houses. Most often, the main factor for a higher price is not the desire to get a higher profit, but additional investments that make the project unique, for example, a recuperative ventilation system or smart heating regulation,” says development project manager T.Žiaugra.

The largest share of supply, about 64%, is currently made up of economy-class apartments. Middle-class apartments account for 31%, prestigious apartments – just 5% of the new apartment market. “During the quarter, the supply of prestigious-class apartments decreased the most, by 7%. The supply of economy-class apartments increased by as much as 15%, since in the third quarter of this year, the apartment segment of this class was supplemented by as many as 600 apartments in various districts of Vilnius – Pilaitė, Pašilaičiai, Justiniškės, Šnipiškės. The middle-class supply was supplemented by about 280 apartments in new apartment buildings over the last three months, but due to high buyer activity, the number of apartments in this segment increased by only 6%,” calculates Tomas Žiaugra.

Currently, about 2,500 apartments are offered in the primary housing market of Vilnius. Although several new apartment buildings are added to the supply every month in various parts of Vilnius, the supply is increasing gradually due to the obvious increased interest of buyers in newly built housing. Otherwise, the pre-crisis “stockpile” of new housing would be reached in an instant, i.e. about 3,000-3,500 apartments. For example, in the third quarter of this year alone, the Vilnius market was supplemented by about 900 new apartments, and the total supply of new housing increased by only 11%. “The sharply increasing competition among real estate developers forces us to design very carefully and meticulously, taking into account the smallest details that would create a greater sense of comfort for the buyer in everyday life,” says the head of development projects at “Eika”.

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.