Sales of new apartments in Vilnius more than doubled

The Center of Registers also recorded a record number of housing transactions. During the first quarter of 2014, 2,360 housing sales transactions were concluded in Vilnius, which is 47% more than in the same period last year and 8% more than in the last quarter of 2013.

“In the first quarter of this year, sales of new apartments in Vilnius grew faster than those of old-construction apartments. Even the most optimistic sales forecasts from the beginning of this year were exceeded. Investors were particularly active in the first quarter, most often purchasing apartments of 35-50 square meters. Investors choose apartments as soon as sales of a new project begin, regardless of the stage of construction. The recovering economy, low interest rates and expectations for the introduction of the euro are the main factors currently driving the growth of demand for apartments,” says Tomas Žiaugra, Development Project Manager at Eika.

Sales of economy and middle-class apartments doubled during the year. In the first quarter of 2014, 670 economy-class apartments were sold, which is 64% of all new apartment sales. The middle class accounted for a third of new apartment sales, which is about 350 apartments. Due to limited supply, only 2% of apartments sold were luxury apartments.

According to the development project manager of Eika, during the first three months of this year, the most popular districts in Vilnius were Pilaitė (15%) and Pašilaičiai (15%), which accounted for 30% of all new apartment sales. In third place in terms of sales activity is Žirmūnai (13%), where buyers are offered mid-range apartments. As in 2013, the completion of the project did not have a significant impact on buyers’ decisions. 47% of apartments were sold in completed, 36% under construction and 17% in apartment buildings under construction.

Growing sales also affected the prices of apartments for sale. Over the year, the average price of economy-class apartments increased by 5.3% and currently stands at 4,334 litas per square meter. In the middle-class, the price of apartments increased by as much as 6.2% per year and stands at 5,611 litas per square meter. In the prestigious class, the price of apartments increased by 0.8% per year to 8,250 litas per square meter. The average price of newly built apartments for sale in Vilnius grew by 5.9% per year, by 2.5% per quarter, and currently stands at 5,081 litas per square meter.

Real estate developers are currently offering about 1,530 new apartments in Vilnius, 38% of which are in apartment buildings that are still under construction. In the first quarter of 2014, the supply of apartments decreased by as much as 25%, although more than 500 apartments in eight projects were added to the market. “The current supply does not yet meet the increased demand. There is a particularly large shortage of supply in the prestigious segment, with only 100 luxury new apartments being sold,” says T. Žiaugra. “Real estate developers have become more active, so buyers looking for new housing in the second and third quarters of this year will have more options. Most new apartments are planned to be offered to buyers of economy and middle-class housing, but we will also see new projects in the prestigious segment. Due to the increased pace of purchases, the supply in Vilnius should not exceed 2,000 apartments by the end of this year. The supply of new apartments should increase rapidly in 2015, when this year’s good results will encourage developers to increase construction volumes. If banks favorably evaluate such rapid development of the housing market, next year the supply may reach the risky limit of 3,000 apartments,” says an Eika representative.

According to T. Žiaugra, home buyers should also assess the risks of a rapidly growing market. “When choosing a home, it is important to evaluate the developer’s experience, the guarantees provided, and the quality parameters of the houses being built – the materials used, technologies, and energy efficiency. Housing is an important long-term investment, so the choice should not be rushed,” he advises.

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.