Insight
EIKA Development Director Martynas Žibūda:
“Until now, history has probably not seen more drastic changes in the Vilnius new housing market than in the first half of this year: after reaching a record number of 596 and 655 transactions in January and February, the market practically stopped in mid-March after the quarantine was announced, when developers sold only 132 apartments in March and 53 in April. The market bottomed out in the third and fourth weeks of the quarantine, when the number of canceled transactions was 4 times higher than the number of newly concluded transactions, but since then the situation has been improving rapidly and the number of transactions is growing.”
This resulted in 1,794 apartments being sold in the first half of 2020, or 39 percent less than in the corresponding period last year, and this decrease is as much as 72 percent compared to the second quarters of this and last year (1,470 and 411 apartments sold in 2019 and 2020, respectively). However, the market recovery trend seen after the quarantine is encouraging: while only 53 apartments were sold in April, this number grew to 127 in May, and 231 apartments were sold in June. We have already reached the 2018 sales level, which was recorded just two years ago, and after the shock experienced, it is quite optimistic. If during the quarantine we primarily focused on clients who needed housing today, now, after the quarantine, more and more apartments are being sold to investors who believe in market stability and the security of their savings.
In the second quarter of the year, buyers mostly chose housing in apartment buildings that were still under construction, with almost 65 percent of the housing sold in them. Economy and middle-class housing remained the most popular, with 46 percent and 43 percent sold, respectively. The remaining share, about 11 percent, was for luxury housing.
The number of vacant apartments has practically not changed during the year. Currently, there are about 4,170 vacant apartments in the Vilnius housing market – 3 percent less than at the same time last year, but about 15 percent more than three months ago. The growing supply and the introduction of almost 900 new apartments in 14 projects to the market in the second quarter of the year indicate the mood of real estate developers and their faith in themselves and the market.
As the data for the last three months shows, the quarantine has not affected housing prices. Currently, the average market price in Vilnius is 2,100 EUR per sq m, or an increase of 4.7 percent over the year. Compared to the prices of the previous quarter, the overall average price has decreased by 3.1 percent, but this was due to cheaper projects entering the market during the quarter, which slightly “diluted” the average price.
It seems that uncertainty and ignorance are gradually dissipating, the expectations of both residents and other market participants – developers, banks and builders – are improving, so we want to hope that we will not experience similar cardinal changes in the near future, and the real estate market, like the entire country’s economy, will gradually return to its previous volumes.
Facts
- In the second quarter of 2020, 411 apartments were sold in the primary housing market of Vilnius, which is as much as 72 percent less than in the second quarter of 2019 (1,470 apartments) and 70 percent less than in the first quarter of 2020 (1,389 apartments).
- The largest share of transactions was made up of economy class sales – 46 percent of transactions, the middle class was not far behind – 43 percent of transactions, and 11 percent of sales were in the luxury housing segment.
- The amount of unsold housing decreased by just 3 percent over the year and currently stands at 4,170 vacant apartments.
- About 33 percent of this warehouse consists of completed and under construction apartments, and 2 out of 3 apartments for sale, or 67 percent, are in the midst of construction.
- In the second quarter of 2020, real estate developers offered almost 900 new apartments to the market, i.e. 36 percent less than in the second quarter of 2019, when construction and sales of 1,380 apartments began.
- During the second quarter of 2020, the price of new apartments in Vilnius changed the most in the economy class – it grew by 1.9 percent, in the medium class it decreased by 0.7 percent, and in the luxury segment the growth was 0.4 percent. The price level currently reaches 1580 EUR / sq. m. in the economy class, 2220 EUR / sq. m. in the medium class and 3140 EUR / sq. m. in the prestigious class.
- Due to the above-mentioned price changes, the total average price of new housing in Vilnius decreased by 3.1 percent during the quarter: from 2,170 EUR / sq. m. to 2,100 EUR / sq. m.