Different trends in new housing markets in Kaunas and Klaipėda

In 2015, a third more new apartments were sold in Kaunas than in Klaipėda. In the temporary capital, about 340 new apartments were sold and reserved last year, i.e.  3% more than in 2014, while in the port city – 250 new apartments, i.e. 16% less than in 2014 or the same as in 2013. According to preliminary data from the Center of Registers, last year about 3,660 apartments were sold in Kaunas, almost 11% less than in 2014, and about 2,720 housing transactions were concluded in the port city, 6% less than in the previous year.

“In Kaunas, the primary housing market trends in 2015 were very similar to those in Vilnius – a slow start to the year and uncertainty about the euro, and accelerated sales in the second half of the year. Meanwhile, in Klaipėda, buyers in the primary market remained passive for the first two quarters of the year, and only in the second half of the year did sales jump and almost reach last year’s level,” says Tomas Žiaugra, Eika Development Project Manager.

In Kaunas, spacious, newly built apartments of over 100 sq m remained the most popular last year. Meanwhile, in Klaipėda, the choice of customers in 2015 surprised developers – the long-dominant preference for functionally planned 60-65 sq m, new three-room apartments was replaced this year by spacious, newly built apartments of up to 100 sq m. In both large cities, small, one-room apartments of up to 30 sq m remained the most popular in old-built houses, which accounted for about 18% of all sales transactions.

The price per square meter of new apartments in Kaunas has been stable for the last few years and currently stands at around 1,050 euros per sq. meter. The price has increased by around 2% over the year. In Klaipėda, the average price per square meter of new apartments grew last year in a similar way to Kaunas – around 2%, and currently stands at around 1,290 euros per sq. meter.

According to the data of the company “Eika”, in Klaipėda, the supply of new apartments increased by about 7% in 2015 and currently amounts to about 700 new apartments. During the year, the Klaipėda market was supplemented by about 10 new small projects, in which about 300 apartments were offered to buyers. Meanwhile, in Kaunas, the supply of new housing decreased by 22% and currently amounts to about 550 new apartments. During the year, the Kaunas market was also supplemented by about 10 new projects, which offered about 200 new apartments to customers. “The lack of new projects in Kaunas leads to a stable average price per sq. meter, which is lower than in Vilnius or Klaipėda, but at the same time it harms the market. Real estate (RE) developers are very cautious about new projects and are usually hesitant to take the risk of offering a more expensive product to the market, doubting its demand. The situation in Klaipėda is somewhat different, there the market is constantly replenished with new projects, albeit small ones, which increase competition for the existing supply and give the market vitality,” says the development project manager at Eika.

According to T. Žiaugra, we should expect more changes in the Kaunas new housing market in 2016. “The growing sales of new apartments throughout 2015 should have helped many real estate developers make their decisions, so this year Kaunas residents should expect even several larger new housing projects. There should be no major changes in Klaipėda, the market in the port city seems quite balanced. The current level of demand will not cause more activity among real estate developers than in 2015,” says T. Žiaugra.

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.