Insight
Tomas Žiaugra, Head of the Development Department at Eika:
After a stable 2023, the new housing market started 2024 much more actively: in the first quarter of 2024, 707 apartments were sold in Vilnius, which is 23 percent more sales than the average for the same quarter last year (576 apartments). The almost quarter-increase in buyer activity was most felt in the economy segment, where the number of home buyers increased by as much as 40 percent in the first quarter, while middle-class sales increased by 24 percent in the quarter compared to the fourth quarter of 2023. Prestige class sales decreased by 17 percent in the quarter..
Developers are also responding to the situation in their own way. With demand declining, some of them used 2023 to prepare so that, with increasing customer activity, they would be able to offer the necessary products to the market. During the first quarter of 2024, sales started in as many as fifteen new projects, where about 1,090 apartments were offered, which is as much as 45 percent more than in the previous quarter (750 new apartments). The number of vacant apartments on the market increased by 11 percent and currently stands at 3,790 apartments, which, historically speaking, is not a large “stock”.
After more than a year of unchanged average new housing prices, the first quarter of 2024 stood out – the total market price increased by 2.7 percent. (3440 EUR/sq m), but this was mainly due to several prestigious class projects that started, which significantly increased the average price. But different processes are taking place in individual market segments, which are not always reflected in the general statistics. In the economy class, housing became cheaper by 2.0 percent during the quarter. and currently the price reaches 2760 EUR/sq m. – in this segment, the biggest compromises are made, trying to find agreements between buyers and sellers, and even 6/10 of the apartments built on the market are in this segment. Meanwhile, housing prices in the luxury segment recorded an impressive jump – currently reaching about 6130 EUR/sq m. – due to the decrease in supply over the past few years, any start of a new project in this segment has a significant impact on the total price. The price of middle-class housing remained unchanged during the quarter – it remained at 3,690 EUR/sq m..
2024 will likely remain the year of buyers, as agreements between buyers and sellers will have to be found to keep the market viable, but the biggest winners will be those buyers who do not create unreasonable expectations and are not in a position to make decisions – this is the message we ended 2023 with, and it seems that 2024 has started exactly that way. While the interest rate press is still putting a lot of pressure on market participants, compromises between buyers and sellers are being sought and found. This allows us to expect greater buyer activity in order to purchase housing on the best terms, and for developers to complete the projects they have started and start thinking about new ones..
Facts
707 apartments were sold in the first quarter of 2024. The result of the quarter is 29 percent higher than the fourth quarter of 2023 (549 apartments), and is 10 percent higher compared to the first quarter of 2023 (642 apartments).
In the first quarter of 2024, the distribution of medium and economy class housing was similar – 49 percent of apartments sold (345 apartments) and 48 percent (338 apartments), only 3 percent of apartments sold during the quarter were luxury housing (24 apartments).
During the quarter, the number of buyers of economy-class housing increased the most – 40 percent, middle-class sales increased by 24 percent during the quarter compared to the fourth quarter of 2023. Sales of prestige class decreased by 17 percent during the quarter, but the number of apartments sold decreased by only 5 apartments – from 29 to 24 apartments sold..
During the first quarter of 2024, the number of vacant apartments on the market increased by 11 percent and currently stands at 3,790 vacant apartments on the market, compared to 3,410 in the previous quarter..
During the quarter, the share of completed and under construction apartments on the market increased from 38 percent to 40 percent (1,510 apartments), while the remaining 60 percent (2,280 apartments) of apartments are visible only in drawings or in the midst of construction..
Of the 1,510 completed and under-construction apartments available on the market, 61 percent are economy class, 38 percent are middle class, and only 1 percent are prestigious..
During the quarter, the number of vacant apartments changed the most in the prestigious class segment – after a long break, it increased by as much as 56 percent (up to 270 apartments), in other segments, the number of vacant apartments increased by 18 percent (up to 1,810 apartments) in the middle class and 1 percent in the economy segment (1,720 apartments)..
During the first quarter of 2024, developers offered about 1,090 new apartments to the market, which is 45 percent more than in the previous quarter (750 new apartments).
During the first quarter of 2024, the price of new apartments in Vilnius grew the most in the luxury segment – by as much as 11.3 percent, which was determined by the supply of new projects on the market, a growth of 0.5 percent was recorded in the average segment, and economy-class housing became cheaper by 4.4 percent. The price level currently reaches 2,760 eur/sq m in the economy, 3,690 eur/sq m in the average and 6,130 eur/sq m in the prestigious class..
Due to the above-mentioned price changes, the total average price of new housing in Vilnius increased by 2.7 percent during the quarter: from 3,350 EUR/sq m to 3,440 EUR/sq m in 2024..