Record sales in Vilnius are being replaced by record supply

Real estate developers sold about 760 new apartments in the second quarter of the year, which is 27% less than in the first quarter of the year, but 43% more than in the second quarter of 2013. 57% of all new apartment sales were economy-class housing. The middle class accounted for 39% of new housing sales transactions, and only 4% of apartments sold were luxury housing. “By the end of the year, the supply in the prestigious class should at least double, so we expect more significant sales of luxury apartments,” says Tomas Žiaugra, head of development projects at Eika.

“In the second quarter of this year, sales of new apartments in Vilnius slowed down. In the first quarter of the year, investors were particularly active, mostly purchasing one- and two-room apartments for rent. Particular interest in apartments was felt in January-April, but in May-June, market activity returned to last year’s level, when about 220 new apartments were sold in the primary market per month,” says an Eika representative.

During the second quarter of 2014, the supply of apartments in Vilnius was supplemented by almost 1,500 apartments in twenty new projects. The supply grew mainly in the middle class – as much as  68%, while the supply of economy class apartments grew by 26% during the quarter, and the prestigious class – by 34%. Currently, the largest supply of new apartments is recorded in Žirmūnai (20%), Pašilaičiai (12%) and Pilaitė (9%). In total, buyers can choose from more than 2,450 new construction apartments. “In the third quarter of this year, the market should be supplemented by about 800-1,000 more apartments. The growth rate of supply should decrease only by the end of the year, so buyers’ options will remain large. The increased supply of new housing should naturally adjust the market price, so speculation about the growth of local prices remains small,” says the head of development projects at Eika.

During the second quarter of 2014, the average price per square meter in the primary market increased by 3.2% to LTL 5,240, and by 8.5% over the year. The price of new economy-class apartments remained the same as at the beginning of the year – LTL 4,350 per square meter. In the middle-class, the price of apartments increased by 3.7% to LTL 5,820 per square meter. In the prestigious class, apartment prices rose the most – by as much as 8.5% and currently reach about LTL 8,950 per square meter. This was mainly due to new projects, where buyers were offered small apartments closer to the center, which is why their average price per square meter was higher.

Sales	2013			2014		Total per year	Compared to Q2 2013, %
	2nd quarter	3rd quarter	4th quarter	First quarter.	2nd quarter
Economical	279	397	400	671	436	1.904	56%
Medium	233	230	244	353	298	1.125	28%
Prestigious	23	21	18	23	29	91	26%
Total	535	648	662	1047	763	3.120	43%
Change per quarter, %	6%	22%	3%	58%	-27%

TOTAL	Jul.13	Sep.13	Jan.14	Apr.14	Jul.14	Change per year, %
	2.035	2.354	2.045	1.723	2.446	20%
Finish	643	654	548	538	493	-23%
Finishing up	645	674	765	419	423	-34%
Under construction	747	1.026	732	766	1530	105%

Apartment type	Jul.13	Sep.13	Jan.14	Apr.14	Jul.14	Change per year, %
Economy class	4.192	4.259	4.235	4.334	4.353	3.8%
Middle class	5.362	5.462	5.631	5.611	5.821	8.6%
Prestige class	8.090	8.093	8.059	8.250	8.956	10.7%
Total average price per sq m	4,834	4.910	4.958	5.081	5.243	8.5%

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.