Insight
EIKA Development Director Martynas Žibūda:
“The beginning of 2019 in the primary housing market of Vilnius shows astonishing activity. During the first quarter of 2019, 1,470 apartments were sold in the primary housing market of Vilnius, which is 74 percent more than in the same period last year. Despite the impressive numbers, this is not an unexpected and one-time sales surge: an increase in buyer activity has been recorded for the ninth month in a row. If in the first half of 2018, developers sold about 300 apartments every month, then in the second half of the same year this indicator rose to 400, when in the first quarter of this year sales almost reached the indicator of 500 apartments per month.
The beginning of this year continues the trend observed for a couple of years now – significantly more middle and prestigious class housing is being sold than economy class. The growing demand for middle and prestigious class housing, which is almost entirely being developed in the city center or near the center, reveals the changing face of the city and changes in the lifestyle of Vilnius residents, i.e. the desire to live in the city center and take advantage of the improving city infrastructure.
Slightly less than sales, but the activity of developers also increased impressively compared to the period in question with the first quarter of 2018. During 2019, 67 percent more housing was offered to the market than in the same period in 2018. It is obvious that due to high demand, the supply grew most in the middle and prestigious classes. On the other hand, even such a large supply is able to be absorbed by the market and the number of vacant unsold apartments on the market remains similar: it decreased by 6% during the quarter, although compared to the same indicator a year ago, it is one tenth higher.
High buyer activity led to the statistical average housing price increasing by almost 11 percent per year or 2.6 percent per quarter and exceeding the psychological threshold of EUR 2,000 per sq m. The greatest influence on this indicator was the changing structure of new housing – more and more expensive housing is being built and sold every year, the share of which is moderately increasing.
It is likely that the growth of supply adequate to demand, the changing lifestyle of city dwellers, and moderate price growth are the most immediate trends this year.”
Facts
- During the first quarter of 2019, 1,470 apartments were sold in the primary housing market of Vilnius, which is 74 percent more than in the first quarter of 2018 (844 apartments), and 37 percent more than in the last quarter of 2018, when 1,073 apartments were sold.
- The largest share of transactions was made up of middle-class housing sales – 53 percent of transactions, slightly less economy class – 37 percent of transactions, and 10 percent of sales were in the luxury housing segment.
- Compared to the first quarter of last year, the number of buyers of luxury housing increased the most – by as much as 114 percent (152 apartments). Middle-class sales also almost doubled – by 98 (779 apartments). The volume of middle-class apartment sales during the quarter exceeded the previous highest volume of sales by as much as 40 percent. Economy-class sales changed the least – by 42 percent. growth (539 apartments).
- During the first quarter of 2019, the amount of unsold housing decreased by 6 percent and currently stands at 4,350 vacant apartments, but this is 10 percent more than at the same time last year.
- 21 percent of unsold apartments are completed apartments, about 13 percent are apartments in the final stages of construction, and 66 percent of vacant apartments on the market are under construction.
- During the quarter, the number of vacant apartments decreased in all segments, as more new projects were sold than offered to the market. The supply shrank the most in the economy class by 10 percent, while the supply in the medium and prestigious classes decreased by 4 percent each.
- In the first quarter of 2019, real estate developers offered 1,200 new apartments to the market, i.e. 67 percent more than in 2018, when construction and sales of 720 apartments began.
- During the first quarter of 2019, the largest price change was in the middle class, where the price of apartments currently on the market is 2.9 percent higher than in the last quarter of 2018 and even 5.6 percent higher than a year ago. In the prestigious class, the growth was 1.8 percent, and in the economy class only 0.6 percent. The price level currently reaches 1,396 EUR/sq m. in the economy class, 2,048 EUR/sq m. in the middle class, and 3,193 EUR/sq m. in the prestigious class.
- Due to the above-mentioned price changes and the reduced share of economy-class housing in the supply, the total average price of new housing in Vilnius increased by almost 2.6 percent – from 1965 EUR/sq m. to 2048 EUR/sq m.