Housing market has woken up, but no faster price growth yet

The Ober-Haus Lithuanian apartment price index (OHBI), which follows changes in apartment sale prices in the five biggest Lithuanian cities (Vilnius, Kaunas, Klaipėda, Šiauliai and Panevėžys) increased by 0.4% in February 2025. The annual apartment price growth in the biggest cities of Lithuania was 4.1% (a 4.0% increase was recorded in January 2025).

In February 2025 apartment prices in Vilnius, Kaunas, Klaipėda, Šiauliai and Panevėžys increased by 0.3%, 0.1%, 0.8%, 0.8% and 0.9%, respectively, with the average price per square meter reaching EUR 2,670 (+7 EUR/sqm), EUR 1,822 (+2 EUR/sqm), EUR 1,754 (+13 EUR/sqm), EUR 1,168 (+10 EUR/sqm) and EUR 1,147 (+10 EUR/sqm).

In the past 12 months, the prices of apartments increased in all the biggest cities in the country: 3.2% in Vilnius, 4.1% in Kaunas, 6.2% in Klaipėda, 6.6% in Šiauliai and 6.7% in Panevėžys.

‘As predicted, a rapid annual growth in the number of housing transactions is recorded at the beginning of 2025. According to the data of the State Enterprise Centre of Registers, 40% more apartments were purchased in the country in January this year and 39% more in February this year than in the same month in 2024. It should be noted that in the first half of 2024 the housing market activity was still in a downward phase and the number of housing purchases had fallen to the lows of the last decade, so the low comparative base allows for a high relative growth this year.

However, the rapid increase in the number of transactions is not only due to the extremely low figures for the first half of 2024, but also to the apparent recovery of the market. The fall in lending rates, rising personal incomes and the recent positive developments in the housing market have brought back at least some of the previously hesitant buyers back to the market. For example, February this year was historically the most productive month in the older apartment segment (compared to February of the previous years). The performance of the primary apartment market in the country’s major cities also shows that the housing market has entered a period of sustained recovery.

Sales prices continue to climb at a moderate pace, with smaller cities in the country experiencing slightly higher price growth. For example, the record high price level in the capital city (especially when taking into account the purchasing power of the population) is somewhat limiting the faster price growth, while smaller cities have a noticeably lower price level and a higher potential for relative price growth.

In the short term, we should also see a fairly rapid statistical recovery of the market (especially compared to the previous year), but in the second half of 2025 activity growth should not be as strong. The recovery of the housing market, which started in mid-2024, has already created a higher level of activity. Meanwhile, house prices should continue to grow at a similar pace as in the last few years. Despite the market-enhancing fundamentals, overall buyer sentiment is likely to continue to be dampened by geopolitical tensions‘, said Raimondas Reginis, head of market research for the Baltics at Ober-Haus.

Full review (PDF): Lithuanian Apartment Price Index, February 2025