Double-digit annual growth in apartment prices in all major cities
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 2.7% in May 2021 (1.4% increase was recorded in April 2021). The annual apartment price growth in the major cities of Lithuania was 11.6% (the annual apartment price growth in April 2021 was 8.6%).
In May 2021 apartment prices in the capital grew 2.3% with the average price per square meter reaching EUR 1,832 (+42 EUR/sqm). Apartment prices in Kaunas, Klaipėda, Šiauliai and Panevėžys grew by 3.4%, 3.4%, 2.6% and 2.9% respectively with the average price per square meter reaching EUR 1,286 (+42 EUR/sqm), EUR 1,270 (+42 Eur/sqm), EUR 859 (+22 EUR/sqm) and EUR 851 (+24 EUR/sqm).
In the past 12 months, the prices of apartments grew in all major cities: 11.6% in Vilnius, 10.2% in Kaunas, 11.5% in Klaipėda, 13.8% in Šiauliai and 15.3% in Panevėžys.
“May of this year became symbolic, when after a faster monthly increase in apartment prices a double-digit annual price increase was recorded in all major cities of the country. In May, the annual increase of 11.6% in apartment prices in the major cities was recorded, the highest since March 2008. The monthly increase of 2.7% in apartment prices in the country’s major cities was really special within the context of the past decade. Higher monthly price increases were recorded only prior to 2008 (before the global financial crisis) and stood at 5-6%.
Although recent price increases are observed across old and new apartment segments, the price increase of new apartments is faster. For example, in Vilnius, the prices of apartments in older buildings increased by 9.5% per year and of new ones – by 14.3%. High demand for newly built residential properties and the decreasing supply of such properties in major cities of the country allow developers to sell at significantly higher prices than before and at least partially compensate for the rapidly increasing construction costs.
The rise in home prices in the country is further stimulated by unfading demand, which in May this year pushed sales figures to record heights. According to the State Enterprise Centre of Registers, in May 2021 about 3,900 apartments were sold in Lithuania and this is the best result in the entire history. Therefore, the extremely active residential property market may in the near future cool off for some time due to the holiday season, when people will direct their time and finances for planning their recreation,” Raimondas Reginis, Market Research Manager for the Baltics at Ober-Haus, said.
Full review (PDF): Lithuanian Apartment Price Index, May 2021