Apartment market growth over four months jump started sales prices
2020-10-08
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 0.3% in September 2020 (0.1% increase was recorded in August 2020). The annual apartment price growth in the major cities of Lithuania was 4.2% (the annual apartment price growth in August 2020 was 4.2%).
In September 2020 apartment prices in Vilnius, Kaunas, Klaipėda and Panevėžys grew by 0.4%, 0.3%, 0.2% and 0.9% respectively with the average price per square meter reaching EUR 1,656 (+6 EUR/sqm), 1,172 (+3 EUR/sqm), 1,142 (+2 EUR/sqm) and EUR 749 (+7 EUR/sqm). In Šiauliai no price changes were recorded and average apartment price remained the same as in August – EUR 762.
In the past 12 months, the prices of apartments grew in all major cities: 4.6% in Vilnius, 3.8% in Kaunas, 2.4% in Klaipėda, 5.7% in Šiauliai and 6.5% in Panevėžys.
“Speaking about sales prices of apartments, it is important to understand that positive news has essentially prevailed in the past four months in the housing market of major cities. The real estate market halted during the lockdown reaching a very low point at which it was not difficult to recover once the economic engine was restarted.
In the context of the housing market, it is important to mention the improved expectations of the population regarding the economic situation of the country as reflected in the consumer confidence index, which has been rapidly on the rise for the fifth consecutive month. According to Statistics Lithuania, the consumer confidence index in the country has increased by 16% in the past five months from minus 16 in April to 0 in September this year (in January-February 2020, the consumer confidence index was positive scoring 3–4).
As a result of the overall improvement in the mood of the buyers, they became actively involved in the housing market and indicators improved. According to the State Enterprise Center of Registers, in the past four months, the number of apartment transactions recorded in five major cities of the country increased by 63%. In September this year, the number of apartments sold exceeded the monthly average of 2019.
In view of the number of transactions concluded for the sale and purchase of apartments and houses in Lithuania, we can see that in September this year a really significant amount of money was poured into the Lithuanian housing market affecting the prices of apartments which slightly increased. Meanwhile, the activity of the housing market and the prices in the coming months will largely depend on further situation concerning the virus and measures of its control. As the first half of this year showed, stricter measures to manage the spread of the virus have an immediately negative impact on the entire real estate market,” Raimondas Reginis, Research Manager for the Baltics at Ober-Haus, said.
Full review (PDF): Lithuanian Apartment Price Index, September 2020