In the capital, a large proportion of housing purchases are made by single individuals, couples and investors, but families with children spend the largest amounts. Interestingly, a third of housing purchases in Vilnius are made by residents registered outside the capital.
These results were revealed after Eika Development Director Martynas Žibūda conducted an analysis of the projects managed by the company. A total of 729 notarial transactions were analyzed in 2020 and 2021.
“I can’t say that this corresponds to the entire market, but our portfolio is quite diversified, we have both economy, middle and prestigious class projects. Therefore, the picture of clients is very diverse. So I dare say that it is representative of the market,” he said at the annual real estate conference “Core”.
The number of investors has decreased
The largest number of buyers by type were singles and investors (26 percent each), as well as 25.1 percent of all homebuyers were couples. A significantly smaller share was made up of families with children (9.8 percent), those buying for children (6.2 percent) and parents (2.6 percent), as well as other types of buyers who buy a home with partial finishing and resell it after furnishing it (4.2 percent).
“I was a little surprised by the investor share in this picture, because it was usually around 30 percent,” he said.
Interestingly, according to preliminary data, comparing 2020 and 2022, the number of investors decreased by 4%, while 8% more single people and 4% more couples are buying homes.
“In 2021, the number of investors decreased slightly due to the pandemic. This category reacted most sensitively to the pandemic and was most skeptical. Naturally, if you have money in your bank account and don’t know what will happen to the market, what to spend it on now, you can wait and see if it’s worth doing it or not. And this is reflected in the notarial contracts of 2021.”
“But what’s interesting is that the share of singles and couples, in terms of the number of transactions, has been growing. This means that singles have been positively affected by the pandemic, and we see the same for couples. So their income has not decreased during the pandemic,” he said on Thursday.
Where does he get the money from?
Looking at what these homes are purchased from, it is noticeable that 42 percent of transactions and 54 percent of all funds come from personal savings. And although 57 percent of the company’s clients buy homes with a loan, this accounts for 46 percent of the funds allocated for the purchase of real estate.
“4 out of 10 transactions were made only with their own money, no bank financing was used. 6 out of 10 took out loans, but in terms of the amount of money, the majority of the total value of the housing was purchased from savings,” he explained.
In addition, M.Žibūda notes that those who do not buy housing for themselves visit the bank less often. 75 percent. investors use their own money when buying housing, while singles, couples and families almost always visit a credit institution when purchasing. In addition, comparing 2020 and 2021, the number of people who buy housing for children and seek help from a bank increased by 30 percent.
“80 percent of investors’ money is equity. Even those who take out loans, they are relatively small. Those who buy for their parents and children behave in the same way,” he said. At the same time, M. Žibūda added that the new requirements of the Bank of Lithuania, which came into effect at the beginning of February, will not affect loans at the moment, because those people who are targeted by the new measure simply do not go to banks to purchase real estate.
It is true that although families with children do not constitute a significant circle of buyers, their purchases – the largest and average transactions – in this category reach 142 thousand euros. Next in line are couples with transactions worth 118 thousand euros, other types of buyers with purchases of 114 thousand euros. Singles spend an average of 98 thousand euros on housing, those buying for children – 93 thousand euros. The smallest amounts are allowed by investors, whose average transaction reaches 83 thousand euros, as well as those buying apartments for their parents, who allocate 79 thousand euros for this.
A third of buyers are not from Vilnius
In general, the ratio of men and women buying apartments is evenly distributed. However, according to M. Žibūda, the research data shows that women dominate among single people, while men dominate among investors. In addition, of all those who bought housing for children and parents, the majority are women.
The most interesting thing is that a third of housing in the capital is purchased by non-Vilnius residents. 28.53 percent of buyers have their residence registered in other cities, and 4.53 percent abroad. It is noticeable that non-Vilnius residents often buy housing for their children, while Vilnius residents often buy housing for themselves and their family.
“When asked about emigrants buying housing, the growth is obvious. If we previously had about 2 percent of such buyers, now there are 4.5 percent. Returnees could also have influenced this. So with that flow, investments are also coming,” he said.
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