Insight
Martynas Žibūda, EIKA Development Manager:
The third quarter of 2018 was marked by long-standing figures in the primary housing market – 1,194 new apartments were sold in Vilnius during the quarter. Similar sales were recorded only in the record-breaking year of 2016. Increased buyer activity resulted in the number of apartments sold in 2018 exceeding the sales of the three quarters of the previous year.
It seems that the impressive sales in the third quarter were driven by the increased activity of real estate developers, who offered 1,565 apartments to the market during the quarter, while only 1,800 new housing units were offered during the first two quarters of 2018. This quarter has seen a trend to develop projects as close to the city center as possible, which has been noticeable for several years. This has led to an increasing quality of projects, as about 75 percent of new supply was in the middle and prestigious class, while last year at the same time about 66 percent was economy class housing. Buyers interested in housing should have noticed not only the improved quality of supply, but also a large variety of projects: during the third quarter of 2018, apartments were offered in 17 projects, of which 10 are new and 7 are ongoing. It seems that the improved quality and diversity of projects has become an additional factor that has activated the primary housing market of Vilnius, where sales have not exceeded 900 apartments for the past 5 quarters, while in the third quarter they returned to the high level of 2016 – 1,194 apartments per quarter.
Despite the high activity of developers, the amount of unsold apartments increased slightly – only 3 percent. The stable balance of supply and demand is indicated by the number of vacant apartments not exceeding 4,500 apartments for the third quarter in a row. Real estate developers continue to monitor market demand very closely and develop projects based on real demand figures, rather than unweighted market growth expectations.
A similar level of supply and demand and increased activity in the more expensive housing segment resulted in the average housing price increasing by 2.9 percent in the third quarter of the year from 1904 to 1959 EUR/sq m. The price changes were also influenced by the increased share of A plus energy class housing in sales, the cost of which is slightly higher.
In summary, the quantity, higher quality, and variety of housing offered during the third quarter led to more active homebuyer behavior, which suggests that total sales in 2018 may exceed 2017 results.
Facts
• In the third quarter of 2018, 1,194 apartments were sold in the primary new housing market of Vilnius, or even 33 percent more than in the same period last year. Comparing sales in the three quarters of 2018 and 2017, 1.5 percent more apartments were sold in 2018 than in the same period last year.
• The highest buyer activity during the third quarter of the year was recorded in the middle class (560 apartments sold), with a third fewer economy class housing sold – 395 apartments and 239 luxury housing sold.
• During the third quarter of 2018, the supply of new housing increased by 3 percent and currently amounts to 4,470 apartments. The largest increase in the number of vacant apartments during the quarter was recorded in the middle class, where the number of vacant apartments increased by 21 percent to 1,890 units. The supply of economy and prestige classes increased by 1 percent (1,770 units) and decreased by 4 percent (810 units), respectively.
• During the quarter, the number of apartments under construction decreased the most – by 27 percent to 766, respectively, the number of completed apartments increased by 9 percent (834 units). Meanwhile, the number of apartments under construction increased by 20 percent and accounts for 64 percent of all available apartments on the market, ie 2,872 apartments.
• During the third quarter, the supply was supplemented by 1,565 apartments in 17 projects, of which 10 are new and 7 are ongoing projects.
• During the third quarter of 2018, the total price of new apartments in Vilnius increased by 2.9 percent and currently reaches 1959 euros/sq m. During the quarter, price growth was recorded in all segments: economy – 1.6 percent (1407 euros/sq m.), average – 3.6 percent (1972 euros/sq m.), luxury – 5.0 percent (3137 euros/sq m.)