The total supply of new housing in Vilnius increased by 5 percent in the second quarter of this year and currently stands at 4,170 vacant apartments. Real estate developers offered over 1,000 new apartments to the market, while buyers purchased 875 apartments – the same number as in the same period last year or 4 percent more than in the first quarter of 2018.
Seasonality led to increased developer activity
After a quiet start to the year, in the second quarter of this year, real estate developers showed much greater activity. Over 1,000 new apartments were offered to the market in ten new and ongoing projects, i.e. 200 apartments more than were sold. This resulted in the unsold balance of primary housing in Vilnius increasing by 5 percent. and currently reaches almost 4,200 vacant apartments again. “It is usual that the highest activity of real estate developers is recorded in the second and fourth quarters of the year: in the spring, when new construction begins and at the end of the year, when buyer activity is relatively higher,” says EIKA Development Project Manager Tomas Žiaugra. Over the last three months, the highest activity was recorded in the luxury segment, where the number of vacant apartments jumped almost twice – from 460 to 840 apartments. Such an increase in supply was determined by 5 new projects in the central part of the city and the Old Town. Meanwhile, the supply of housing in the middle class increased by 3 percent, while in the economy class it decreased by 12 percent.
The changing supply structure has led to the fact that the total average price of vacant apartments on the market has increased by as much as 5 percent during the quarter and currently stands at 1920 EUR/sq m. “The increase in the price of vacant apartments is somewhat deceptive, since almost all projects offered to the market during the second quarter were launched in the medium and luxury segments – this is what led to the jump in the price of vacant apartments on the market” – says EIKA Development Project Manager Tomas Žiaugra. The average price per square meter fluctuated differently in individual segments: in the economy segment – it increased by 1 percent, in the medium segment – it decreased by 3 percent, in the luxury segment – it decreased by 6 percent.
Buyer activity remains stable
During the second quarter of 2018, 875 apartments were sold in the primary housing market of Vilnius, exactly the same as in the same period last year or 4 percent more than in the first quarter of 2018. “Recently, we have been observing the most stable situation in the primary housing market of Vilnius since the crisis – sales in the last five quarters have fluctuated only within 2-3 percent. Next quarter, we will see what impact the unusually hot summer will have on sales,” emphasizes EIKA Development Project Manager Tomas Žiaugra. During the second quarter of this year, the majority or about 47 percent of all sales were made up of economy-class housing, a little less or 42 percent – medium-class housing, and only 11 percent of sales were made up of the luxury housing segment.
The largest number of housing units were purchased in Pilaitė (158 apartments), Naujamiestis (124 apartments) and Šnipiškės (107 apartments). The largest supply of new apartments is currently in Naujamiestis (619 apartments), Pilaitė (599 apartments) and Šnipiškės (497 apartments).
In summary, it seems that the demand for primary housing in Vilnius has found its stable pace, so everything will depend on whether real estate developers carefully monitor the market, the processes taking place in it, and respond accordingly, maintaining a sustainable supply and demand ratio.