The year of 2015 was very active for real estate developers in Vilnius, and expert forecasts about sales returning to the level of 2013 after the introduction of the euro proved not to be correct. Last year the company sold nearly 3450 new apartments, i.e. 18% more than in the previous year. Meanwhile, the secondary housing market in the capital city grew only by 6% – in accordance with preliminary data of the Centre of Registers, last year, up about 8000 apartment sales transactions were done in Vilnius.
“EIKA” development project manager Tomas Žiaugra says that the year was successful for real estate developers because buyers had a huge selection of options in all classes of housing. During the year, the supply has been continuously enriched with new projects – over the year, about 3500 new apartments were offered for the market, i.e. almost the same number as sold. 37% of sales in the capital city amounted to new apartments sold in the first months after announcement of new projects
“Last year, in our new housing projects we first sold new apartments of 1-2 rooms, 28-50 square meters. People bought apartments from their own savings as a better alternative to invest compared to low deposit rates. This trend was observed in all segments. The value of most popular housing acquired as an investment was up to 90 thousand euro”, says “EIKA” representative.
In 2015, the most popular district in the capital city by the sales of new apartments was Naujamiestis (550 apartments), replacing Pilaitė – the leader in this field, where 350 apartments were sold last year. Pašilaičiai (313 apartments) is in the third place in terms of popularity. The largest proportion of sales – 44% in Vilnius were occupied by economy class apartments, but the number of transactions per year dropped by 7%, and this share went to the middle class last year. Sales in this class comprised 40% of new apartments or 26% more than in the previous year. The biggest jump occurred in the luxury housing segment, where the company sold 550 apartments last year, i.e. almost 3 times more than in the previous year. Sales of luxury new apartments last year totalled 16% of the market share.
“During the year, the average price of new apartments in Vilnius increased by 1.2% and now amounts to 1600 euro per square meter. “The price changes in the market took place due to the change in the structure of new housing supply. More higher-end projects were offered for housing seekers, resulting in a slight rise of the market price of apartments. During 2015, the supply has mostly grown in the middle class, by 21% – from 1460 to 1770 apartments, and by 17% in the prestige class – from 390 to almost 460 apartments. In the economy class, on the contrary – the supply decreased by 10%, from 1764 to 1590 apartments”, says “EIKA” development project manager.
The overall supply in Vilnius during the year increased by only 5% and now amounts to 3800 apartments. Currently, the largest choice of new apartments is waiting for buyers in Naujamiestis (680 apartments), less in Šnipiškės (550 apartments), where real estate developers launched several large projects this year. Baltupiai is the third with 390 new apartments offered to buyers.
According T. Žiaugra, in 2015 the market was flooded with investment. Real estate developers, inspired by buyer activity in the middle of 2014, boldly invested in residential development while housing buyers, being convinced that introduction of the euro did not affect housing prices, boldly spent their savings – more than half of the new apartments were purchased by own funds. According to the expert, real estate developers will choose their investment policies more carefully in 2016. With gradual growth of the stock of unsold apartments, less attractive apartments will remain in the market, therefore, developers will be forced to increase liquidity, likely, by reducing the prices of some apartments. Meanwhile, such situation will be useful for customers and especially for those who did not dare to purchase new housing in 2015.
“EIKA” representative predicts that this year’s new apartment sales will not exceed the limit of 3200 apartments. On average, 250-270 apartments a month will be sold, i.e. activity of buyers will remain at similar level to the last quarter of 2015, when the effect of new projects did not influence the market. Supply on the primary market of the capital city should remain at about 4000 new apartments in 2016. Last year, some developers rushed to change their plans and contributed to the supply in 2015, while large new projects are likely to supplement the market in the spring of this year, and bring the supply back to the boundary of 4000.
About “EIKA group”
“EIKA”, established in 1992, is one of the largest real estate development and construction company groups in Lithuania, successfully developing residential, commercial, public buildings and other projects, creating new quality of life and work. The company has already built more than 3,000 apartments and 270 thousand square meters of buildings. “EIKA” has been awarded many times, as the best real estate developer in Lithuania, its projects “Santariškių namai” and “EIKA namai Pilaitėje” were recognised as the best in Lithuania.
More information:
Tomas Žiaugra
Development Project Manager
Tel. +370 5 2045 810
Fax +370 5 2514 256
E-mail tomas.ziaugra@eika.lt
www.eika.lt