This year, March was the most active month, with more than 1000 apartments being purchased. In June, only 250 sales were made. It looks like the unexpected spring storm was replaced by summertime kick-back relaxation. The numbers were most influenced by the apartment prices rising three times faster than usual and the record-low number of available apartments.
The apartments offered by the RE developers were snapped up within the first few months of this year. Only 2850 apartments remain free in Vilnius at this moment and this number has been the lowest since 2014. Out of this number, as many as 142 apartments are fully finished while others are still in the first or medium stages of construction. A year ago, 1000 apartments were fully constructed by this time.
RE developers tried to control the high demand by offering new apartments and increasing the prices of the available ones. The latter rose by as many as 4% within one quarter. This percentage is usually used to describe the annual price index. It is worth mentioning that the price increase reached the double digits in certain RE segments, e.g., the middle class.
It would seem that RE developers succeeded in stabilizing the market situation this way: the increased apartment prices and low availability caused people to pause in their purchasing and turn to other Lithuanian cities or foreign countries for respite and vacation after the quarantine was called off. RE developers are, however, counting the foreboding increase in construction costs and trying to assess their capacity to uphold the promises given to the buyers. There are hopes that this summer will bring some semblance of normalcy both to the global and Vilnius RE markets, stabilize the demand and the offer ratio and allow for some discussions of a smoother market development.
Facts
- A total of 1561 apartments sold in the primary Vilnius RE market in the second quarter of 2021, which is 41% less than the record high 2664 apartments in the first quarter of 2021 but almost 4 times more than the 411 apartments in the second quarter of 2020.
- A total of 4225 apartments was sold in the first quarter of 2021. Until 2018, the annual sales had fallen short of this number. Last year, annual sales were 10% higher than the number of apartments sold within half a year this year.
- The sales of economy apartments constituted 48% in the quarter, that of the middle class reached 37%, and the remaining 15% represented the luxury apartments.
- The number of middle-class buyers decreased the most, i.e., by 52%, within the last quarter: 751 apartments were sold in the second quarter of 2021 compared to 1215 apartments in the first quarter of 2021. The sales of economic class apartments decreased by 38% within the quarter, compared to the first quarter of 2021 (falling from 1206 to 751 apartments). The sales of luxury apartments had little change and experienced a 5% decrease (falling from 243 to 230 apartments).
- The number of vacant apartments decreased by as much as 12% in the second quarter of 2021. Presently, only 2850 apartments are available for sale. A smaller number of vacant apartments for sale was recorded only in 2014.
- Only 12% of the vacant apartments are completed or close to completion. The remaining 88%, that is 9 out of 10 apartments for sale, are at the beginning or medium stages of construction.
- Within the quarter, the number of vacant apartments mostly decreased in the luxury and middle-class sectors (by 34% and 26%, respectively). The available economic apartments seemed to actually increase by about 10%.
- A total of 1328 new apartments were for sale in the second quarter of 2021. This is one third less than in the first quarter of 2021, when 2100 apartments were constructed and put for sale.
- The price of apartments in Vilnius in the second quarter of 2021 increased the most (by 10.4%) in the middle-class sector. The price of economic apartments went up by 6.8% and of luxury apartments by 7.1%. This means that the price of an economic apartment is EUR 1,960 per square meter, that of middle-class apartment is EUR 2,590 per square meter and that of a luxury apartment is EUR 3,420 per square meter.
- Due to these changes in prices, the average price of a new apartment in Vilnius increased by 4.0% within the last quarter, i.e., from EUR 2,269 per square meter in April 2021 to EUR 2,359 per square meter at the end of June 2021. The general price did not increase as much, compared to the separate sectors, because many new economic apartments at lower prices become available.
About EIKA Group
Founded in 1992, EIKA is among the largest corporate groups engaged in real estate development and construction in Lithuania. The company has been successfully developing residential, commercial, public and other purpose construction projects and has constructed over 5,250 apartments and buildings covering an area of 465 thousand square meters. EIKA has received numerous awards for being the best real estate developer in Lithuania, with its most prominent Lithuanian projects being Santariškės Homes, Basanavičiaus 9A and Eika Houses in Pilaitė.
Translated by MP Translations Agency in Kaunas
