Record-breaking home buyer choices in Vilnius

Over the past three months, sales of new apartments have stabilized, with about 200 new apartments sold per month. According to data from the company “Eika”, real estate developers sold about 610 new apartments in the third quarter of 2014, which is 20% less than in the second quarter of this year and 6% less than in the same period last year. According to Tomas Žiaugra, the head of development projects at “Eika”, the current sales level is in line with long-term trends and it can be said that the so-called “euro euphoria” has subsided.

“Over the past six months, those looking for new housing have been offered almost 3,000 new apartments in apartment buildings that are just starting to be built. During the second and third quarters of this year, 1,370 apartments were sold, i.e. 2.5 times less than the number offered for purchase. This mismatch between supply and demand should encourage real estate developers to reduce supply. Otherwise, the housing market will be overcrowded in 2015 and the threat to the implementation of certain projects will increase. Companies that do not have experience with one project will especially feel the competitive environment,” says an Eika representative.

During the third quarter of 2014, the average price per square meter of newly built apartments increased by 5.3% and reached LTL 5,520, and over the year – by 12.5%. The increase in the average price was determined by the increased supply of medium and prestigious class housing. The supply almost doubled in the luxury housing segment, and the number of apartments in the middle class increased by  57%. The smallest growth in supply is recorded in the  economy class, where the choice of apartments increased by only 9% during the quarter. During the third quarter of 2014, the supply of apartments in Vilnius was supplemented by almost 1,500 apartments in as many as twenty new projects. Currently, buyers have the greatest choice of housing in Žirmūnai (22%), Pašilaičiai (8%) and Pilaitė (7%). In the third quarter of 2014, the most frequent choice of buyers was Naujamiestis, Pilaitė and Šnipiškės, which accounted for 11% of sales each.

“The huge supply of new construction apartments should be viewed as a logically explicable reaction of real estate developers to the increased sales in the first quarter. It is likely that housing supply will grow inertially until the end of the year, but such a sudden and abundant growth in housing supply is not sustainable and does not meet real market needs,” says an EIKA representative.

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.