Insight
EIKA Development Director Martynas Žibūda:
“The results of 2018 in the primary housing market of Vilnius show market stability and moderate growth. After 2017, when apartment sales contracted by a tenth, in 2018 we recorded 6 percent growth again. If economy and middle-class housing were purchased almost identically, the overall growth in sales was largely determined by particularly active buyers of prestigious housing, who in 2018 bought 72 percent more of the most expensive apartments than in 2017.
It seems that this was due to a significant increase in the supply of prestigious apartments. As much as sales – 6 percent – the activity of developers increased, who offered the most housing to the market since 2008. This led to a 13 percent increase in the stock of unsold housing to a record 4,630 apartments. On the other hand, the number of apartments built was even decreasing, which indicates good market liquidity.
EIKA buyer research shows that more than half of prestigious apartments were purchased by investors, who in four out of five cases used their own rather than borrowed funds. The popularity of more expensive housing led to an average price increase of 2.3 percent for prestigious housing over the year, 1.1 percent for average housing, while the price of economy class housing remained practically unchanged at 0.2 percent.
All these indicators indicate that increased developer activity and qualitative changes in the supply led to higher sales than in 2017, and similar trends can be expected this year: developers will closely monitor demand, and customers will have excellent choices.”
Facts
- In 2018, 3,986 apartments were sold in the primary housing market of Vilnius, which is almost 6 percent more than in 2017 (3,775 apartments), but 5 percent less than in the record year of 2016, when 4,177 apartments were sold.
- The largest share of transactions was made up of middle-class sales – 46 percent of transactions, followed closely by the economy class – 43 percent of transactions, and 11 percent of sales were in the luxury housing segment.
- The number of luxury home buyers increased the most during the year – by as much as 72 percent: 445 apartments in 2018 compared to 249 apartments in 2017. This was mainly influenced by the increased supply of new prestigious projects, which did not exist in 2017. Sales of middle and economy class practically did not change during the year: 1,705 compared to 1,694 economy and 1,836 compared to 1,822 middle class sales in 2018 and 2017.
- During 2018, the amount of unsold housing increased by 13 percent and currently reaches an unprecedented number of 4,630 apartments.
- Only 20 percent of this warehouse consists of completed apartments, about 12 percent are under construction, and 68 percent are under construction.
- The largest growth in unsold apartments was recorded in the luxury segment, where the number of vacant apartments increased by as much as 138 percent over the year, in the medium segment – by 29 percent, while in the economy class the trends were opposite – the supply decreased by 19 percent.
- In 2018, record activity among real estate developers was recorded – about 4,520 new apartments were offered to the market, i.e. 6 percent more than in 2017, when construction and sales of 4,260 apartments began. This is the highest supply recorded since 2008.
- In 2018, the price of new apartments in Vilnius in individual segments grew by no more than 2 percent: 2.3 percent in the prestigious class, 1.1 percent in the average class, and 0.2 percent in the economy class. The price level currently reaches 1,388 EUR/sq m. in the economy class, 1,991 EUR/sq m. in the average class, and 3,138 EUR/sq m. in the prestigious class.
- Due to the aforementioned price changes and the increased share of prestigious housing in the supply, the total average price of new housing in Vilnius increased by almost 11 percent: from 1,774 EUR/sq m. last year to 1,965 EUR/sq m. at the beginning of this year.
- EIKA’s buyer analysis showed that investors remain the largest buyer segment, accounting for about 37 percent of transactions in 2018. Accordingly, couples without children accounted for 24 percent of transactions, singles – 21 percent, couples with children – 14 percent, and others – 4 percent.
- The aforementioned study shows that investors purchased 53 percent of prestigious housing, 80 percent of which was paid for with their own funds.