Positive price changes as activities in the apartment segment gather pace
The Ober-Haus Lithuanian apartment price index (OHBI), which records changes in apartment prices in the five major Lithuanian cities (Vilnius, Kaunas, Klaipėda, Šiauliai and Panevėžys), increased by 0.2% in June 2020. The annual apartment price growth in the major cities of Lithuania was 5.6% (the annual apartment price growth in May 2020 was 6.3%).
Apartment prices in Vilnius, Klaipėda, Šiauliai and Panevėžys in June grew by 0.3%, 0.2%, 0.4% and 0.2% respectively with the average price per square meter reaching EUR 1.645 (+6 EUR/sqm), 1.141 (+2 EUR/sqm), 758 (+3 EUR/sqm) and EUR 739 (+1 EUR/sqm). In Kaunas no price changes were recorded and average apartment price remained the same as in May – EUR 1.167.
In the past 12 months, the prices of apartments grew in all major cities: 5.9% in Vilnius, 5.5% in Kaunas, 3.9% in Klaipėda, 7.7% in Šiauliai and 7.6% in Panevėžys.
The analysis of the latest data in the apartment segment in the country’s major cities shows that, although the increase in sales prices of apartments has slowed down (the annual increase in sales prices decreased from 7.6% in February to 5.6% in June this year), we continue to record a symbolic increase each month. “The lockdown period was a strong blow to the whole real estate market, but with the end of the lockdown the expectations of the population regarding the economic situation and the real estate market started to grow,” Raimondas Reginis, Market Research Manager for the Baltics at Ober-Haus, said.
This is well illustrated by the consumer confidence index, which, according to Statistics Lithuania has been on the rise for two consecutive months. The consumer confidence index in the country has increased by 12% in the past two months from -16 in April to -4 in June (in January and February 2020, the consumer confidence index was positive and stood at 3–4). This shows that the population is already starting to be more positive about the country’s economic outlook and their own financial situation in the near future.
According to Reginis, the “rebound” in the market activity (number of transactions) in all major cities compared to the decade low indicators in April and May gives additional optimism to the housing market. According to the latest figures of the public enterprise Center of Registers, the number of transactions recorded in June 2020 increased by 5% in Vilnius, 6% in Kaunas, 3% in Klaipėda, 17% in Šiauliai and 13% in Panevėžys, compared to May 2020. The return of buyers to the sector of newly builds in Vilnius and Kaunas has also been recorded – the growing sales volumes of new apartments have been recorded for the second month in a row in these cities.
“Since the gloomiest forecasts of health professionals and economists in connection to the pandemic and the he country’s economic development have failed so far, the likelihood of negative changes in the sales prices of apartments in the country’s major cities in the near future has also decreased. However, if the overall activity of the housing market does not gather pace of recovery or stays at a relatively low current level, we are likely to see a stable price level in the near future with slight both positive and negative fluctuations,” Reginis added.