Insight
Martynas Žibūda, EIKA Development Manager:
During the first quarter of 2018, the Vilnius primary housing market recorded slightly lower apartment sales volumes than during the last three quarters of 2017, but despite this, the stock of unsold housing in Vilnius was decreasing, and the average housing price was increasing.
During the first quarter of 2018, 840 apartments were sold in the primary housing market of Vilnius, or 4 percent less than in the last quarter of 2017, which largely reflects the results of the last three quarters, when an average of 885 apartments were sold per quarter. We can see that despite the sluggish start of 2018, March was more active in the Vilnius housing market than January and February, when 264, 268 and 312 apartments were sold, respectively. The second quarter of the year will show whether this is a growth trend or a temporary fluctuation.
The beginning of the year was not marked by active actions of real estate developers, who offered fewer new apartments to the market during the first quarter of the year than they sold. This resulted in the unsold balance of primary housing in Vilnius decreasing by 3 percent. and currently amounts to less than 4,000 vacant apartments again. It is usual that the greatest activity of real estate developers is recorded in the second and fourth quarters of the year: in the spring, when new construction begins, and towards the end of the year, when buyer activity is relatively higher, therefore we can expect an increase in the number of unsold apartments in the near future. Buyers continue to prioritize the middle class, therefore developers are more focused on a higher class and quality product.
A similar level of supply and demand led to an average housing price increase of 1.7 percent in the first quarter of the year from 1,774 to 1,804 euros/sq m. This means that almost all 11 new or ongoing projects recorded higher housing prices than before. Most likely, the real change in the average price is close to zero, since a large part of developers quite widely apply additional discounts of up to several thousand euros for economy class or residual apartments.
In summary, the primary housing market in Vilnius is still slightly shrinking, but real estate developers are closely monitoring demand and responding accordingly, maintaining a sustainable supply-demand ratio.
Facts
- In the first quarter of 2018, 840 apartments were sold in the primary new housing market of Vilnius, or 4 percent less than in the last quarter of 2017.
- The highest buyer activity during the first quarter of the year was recorded in the middle class (47 percent of market sales), with the economy class not far behind – 44 percent of apartments sold and only 9 percent of sales in the luxury segment.
- During the first quarter of 2018, the supply of new housing decreased by 3 percent and currently amounts to 3,965 apartments. The largest increase in the number of vacant apartments during the quarter was recorded in the prestigious class, where the number of vacant apartments increased by as much as 41 percent. About 200 apartments were offered to the market in Žvėrynes and Konstitucijos Ave. In the average and economy class, the supply decreased by 8 percent and 6 percent, respectively.
- During the quarter, the number of apartments under construction decreased the most – by 12 percent, while the number of completed apartments decreased by 4 percent. Meanwhile, the number of apartments being completed increased by as much as 32 percent.
- In the first quarter of 2018, real estate developers offered over 700 new apartments to the market in 11 new and ongoing projects.
- During the first quarter of 2018, the total price of new apartments in Vilnius increased by 1.7 percent. The increase in the price of vacant apartments is somewhat deceptive, since all projects offered to the market during the first quarter started with a higher than average market price, and in a common economy class project that is being completed, we can expect discounts of 3,000-5,000 euros.