The supply of new apartments in Vilnius will be enough for another year

During the first half of this year, slightly more than 1,000 new apartments were sold directly from real estate developers, which is 31% more than in the second half of 2012 and 48% more than in the same period last year. The Centre of Registers also records higher housing sales, according to which the number of housing transactions in Vilnius in the first half of this year is 33% higher than in the first half of last year.

In the second quarter of this year, the new apartment market in Vilnius was supplemented by new projects, a total of almost 600 apartments, but the supply remained almost unchanged due to extremely active sales in the primary market. Sales of new apartments in this quarter were as much as 28% higher than in the second quarter of 2012. “Recently, we have been observing record sales of new apartments, which have not been seen since the beginning of 2008. Apartments are being bought most actively in those districts where the supply of new apartments is small. New projects that have emerged attract the attention of buyers very quickly. In a short time, all apartments in the new project in Žvėrynes were sold, and in the first two months, half of the apartments were also reserved in the new project in Žirmūnai,” notes Eika market analyst Tomas Žiaugra. The supply in the northern part of the city – Santariškės, as well as Justiniškės and in the central part of the city – Žvėrynes, Naujamiestis – decreased very rapidly over the six months.

During the second quarter of this year, the greatest interest from buyers was shown by economy-class apartments, which accounted for about 51% of new apartments sold. Compared to the previous quarter, the number of economy-class apartments sold was 14%. About 45% of new apartments sold in the second quarter of the year were in the middle class, which was 33% more than in the first quarter of 2013. Only 4% of apartments sold were in luxury housing, the supply of which on the market is insufficient and is constantly decreasing. Since July last year, the supply of apartments in this class has decreased by as much as 25%.

The largest share of supply, about 59%, currently consists of economy-class apartments, most of which are located in Pilaitė, Pašilaičiai and Lazdynai. Middle-class apartments, most of which are located in Žirmūnai, Antakalnis and Naujamiestis, account for 34%, and prestigious apartments account for 7% of the new apartment market. “Over the past six months, the supply of economy-class new-build apartments has decreased the most, by as much as 18%, and the supply of middle-class apartments has also decreased by 9%,” says the Eika market analyst.

Currently, the leader in the supply of new construction apartments is the Pilaitė district, where it is currently possible to purchase just over 300 apartments. In the second quarter of 2013, sales in Pilaitė were the highest and accounted for 15% of all new construction apartment transactions in Vilnius. The average price in this district is 4,220 litas per square meter. The second place in terms of apartment supply is Žirmūnai, where buyers can find 260 new apartments, and the third place is Pašilaičiai with 220 apartments. Currently, the supply in Antakalnis is growing intensively, where it doubled during the second quarter of this year and reaches almost 180 apartments. Buyers also have a wide choice in the residential areas of Viršuliškės, Lazdynai, Naujamiestis, and Fabijoniškės.

The largest real estate projects this year are planned in Naujamiestis (250 apartments), Žirmūnai (200 apartments), Senamiestis (60 apartments), Užupis (100 apartments) and Justiniškės (150 apartments). By the end of this year, the supply is expected to be supplemented by about 1,000 new apartments, but with sales remaining at the current level, the supply will not change at the end of the year.

Eika market analyst Tomas Žiaugra believes that with the rapid growth in sales, the prices of newly built apartments should not rise. “Although demand is growing and exerts pressure on price growth, apartment prices should not increase by the end of the year, except by a slight 1-2%. The possibilities of price growth are reduced by the “injections” of new supply and competition between developers,” says Eika market analyst. T.Žiaugra predicts that by the end of the year, apartment sales in Vilnius will remain similar to the current levels.

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.