Prices of Quality Housing in Lithuania at Record Highs
The value of the Ober-Haus Apartment Price Index (OHBI) in Lithuania, which records changes in apartment prices in the five main cities of Lithuania (Vilnius, Kaunas, Klaipėda, Šiauliai and Panevėžys), rose by 2.9% in June 2022 (growth in May 2022 was 1.7%). In general, apartment prices in the main Lithuanian cities have increased by 21.2% over the last 12 months (annual growth in May 2022 was 20.1%).
In June 2022, apartment sales prices grew by 3.5% in the capital city and the average price per square metre reached EUR 2,308 (+EUR 79/m²). In June, Kaunas, Klaipėda, Šiauliai and Panevėžys recorded increases in apartment prices of 1.8%, 2.4%, 1.2% and 2.4% respectively and the average price per square metre increased to EUR 1,587 (+ EUR 28 /m²), EUR 1,495 (+ EUR 35 /m²), EUR 1,030 (+ EUR 12/m²) and EUR 1,012 (+ EUR 23 /m²) respectively.
Annual growth (June 2022 compared to June 2021) in the sales prices of apartments increased in all the main cities of the country: 23.4% – in Vilnius, 20.8% – in Kaunas, 16.0% – in Klaipėda, 17.7% – in Šiauliai and 17.5% – in Panevėžys.
“In June this year, Lithuania recorded quite solid volumes of apartment sales. According to the data of the State Enterprise Centre of Registers, the total number of apartments sold in Lithuania was 7% higher than in May this year. This June became the second-best performing month of the year and the increase in the number of purchased apartments could be seen in all major cities of the country. However, compared to the same month last year, the number of apartments purchased this year is 12% lower. Nevertheless, taking into account the overall geopolitical and economic situation and the record volumes of home purchases last year, the overall number of apartment purchases remains really solid.
Growth in apartment prices in the main cities of the country has also held firm in recent months, but the annual growth rate has already stabilised and remained largely unchanged. Despite the declining optimism about the economic prospects of the country in the short term and the factors which might negatively affect the real estate market as a whole (e.g., falling real personal income in the context of very high inflation, rising interest rates, or even the increasing likelihood of recession), home sellers’ expectations are still at a very high level.
Quite high level of overall housing market activity in the country still allows home sellers to sell at a higher price not only in the country’s largest cities, but also in its smaller towns. For example, in May-June this year, the average selling price per square meter in Šiauliai and Panevėžys exceeded 1,000 euros. Analysis of the latest registered sale-purchase transactions in these cities shows that buyers are already paying EUR 1,400-1,600 per square metre for good-quality apartments located in the most valuable areas of the city, while the price of the square metre of the most expensive apartments can reach EUR 2,000. The most expensive apartments are those located in new or reconstructed buildings in the central part of Šiauliai or Panevėžys. Similar trends can be observed in the rest of the country, where sales prices of apartments in good condition have reached record highs. In particular, there is a large difference in sales prices between apartments in poorer condition in old multi-apartment buildings and freshly repaired apartments in renovated multi-apartments buildings. Extremely high prices for building modernisation and housing installation have pushed the sale prices of quality housing to record highs throughout the country“, Raimondas Reginis, Head of Market Research for Baltic Countries at Ober-Haus, noted.