Part of housing became more expensive in April: A. Avulis said in which direction the prices will move further | Business

The market is seeing signs of recovery

In April of this year in the primary housing market of the city of Vilnius, Inreal recorded 207 total sales (222 new agreements, 15 returns) – a third less than in March (respectively: 312, 336, 24) and almost identical to April last year (207, 223, 16) .

In April, buyers bought 251 newly built apartments worth 41 million. euros, according to data collected by Hanner analysts. In April, 41 preliminary contracts were also terminated in the Vilnius real estate market.

“During the four months of this year, 18 percent were sold. more housing than during the same period last year, and this can be seen as the first signs of market recovery”, says Arvydas Avulis, chairman of Hanner’s board.

The numbers provided by real estate companies differ due to different calculation methodologies.

According to “Citus” calculations, 200 transactions for the purchase of new apartments and cottages were concluded in the capital in April. A lower result was seen only in 2022. at the end of last year and in January of last year.

“The improvement in consumer expectations, according to official statistics, has been visible for some time. It materialized in the housing market in the first quarter of this year and pushed the housing demand train forward. Traders are already observing the growing purchasing power, but the housing sector is more sensitive and economic changes – and sometimes, as in this case, the lack of them – are felt more strongly. It is clear that home buyers were very much looking forward to the predicted decision of the European Central Bank to reduce interest rates in April, but this did not happen, so now some buyers have withdrawn”, Šarūnas Tarutis, head of investment and analysis of creative real estate projects and area development company Citus, assesses the situation.

Photo by Žygimantas Gedvilas/BNS/Šarūnas Tarutis

According to him, the meeting of the Governing Council of the European Central Bank (ECB) is scheduled again in June in Frankfurt, Germany, during which economists again expect a reduction in the Euribor rate to be announced.

“The European Central Bank, although inflation in the euro zone is decreasing faster than expected, decided to follow a more moderate policy for the time being and postponed the interest rate reduction for another two months.” However, on April 30 fixed for 6 months duration Euribor amounted to 3.795 percent. and was the same as last June – that is, in fact, the lowest in the last 10 months. With three rate cuts forecast this year, the housing market slowdown in April is likely to be a short-term brake click. Already in May, buyers should come back in order to capture the current housing prices, which are stable, and this is favorable for people looking for housing, because in the projects under development, they will definitely see a decrease in Euribor until the notarial transaction”, says the head of investment and analysis of Citus.

Tomas Sovijus Kvainickas, Head of Investments and Analysis at Inreal, says that although sales have contracted during the month, April’s result is the fifth highest in the last two years.

“This shows both the gradual recovery of the market and the extent of its contraction over the past few years.” The population in the capital continues to grow, and rental housing is gradually becoming the main choice for new housing stock. On the one hand, commercial housing rental provides opportunities for better maintenance of the building and its common spaces, on the other hand, the residents’ ability to choose between their own and rented housing becomes limited. Both options may be appropriate, depending on residents’ personal circumstances, but a lack of choice is rarely beneficial,” he says.

Personal archive photo/Inreal Investments and Analysis Manager Tomas Sovijus Kvainickas.

Offers a limit to price increases?

According to “Citus” calculations, the supply in Vilnius gradually grew and consisted of 4,939 apartments and cottages (2.3% more than in March; 9.3% more than last April; 14.3% more than the beginning of this year).

“In Vilnius, we feel a large unrealized need for housing due to rapid population growth, high rental prices, rising prices in the secondary, non-new housing market. Therefore, we are seeing more new projects being offered by developers. During the month, the market was filled with two new projects and one phase of the previously started project – a total of 288 apartments”, comments Š. Tarutis.

Inreal added 153 new properties to its supply observations, four times less than in March (594) and a third less than last April (231), while observed supply fell from 5,175 to 5,095 in the month but was around 14 percent. higher than a year ago (4482).

“Presenting a project to the market is a long-term process. Several years can pass from the purchase of a plot to the start of sales, so a specific month does not always reflect market trends. On the other hand, with the amount of supply exceeding five thousand housing units, and the market operating under conditions of low activity, it is likely that the delivery of new projects to the market will not be the largest in the near term,” says TS Kvainickas.

According to Inreal, among the available housing, 1,023 objects are already reserved.

According to “Hanner”, in April, 323 newly built apartments in 4 projects were offered to the Vilnius market. In total, buyers in the capital can currently choose from 4,350 apartments offered by developers on the primary market.

According to A.Avulis, the supply increased by 14% during the first months of this year, and this strongly limits the possibility of price increases, which have remained stable in Vilnius for 19 months.

Some housing is expensive

According to Hanner’s calculations, at the beginning of May, the largest supply is in the economic segment – 1,748 apartments, the prices of which in the market reach up to 3,150 eur/sq.m. subway The least amount of housing is currently offered in the prestigious segment (1,035 apartments), the price of which exceeds 3,700 eur/sq.m. subway 1,567 apartments are offered to buyers of the middle segment of housing, the prices of which in the market range from 3,150 eur/sq. meter up to 3700 eur/sq.m. subway

According to Inreal, in April there were more price reduction cases than in previous periods – 119. Prices were increased 149 times.

Inreal notes that these statistics do not reflect indirect discounts, when the prices of specific housing units on project websites are not changed. Economy class housing prices increased from 2763 to 2784 eur/sq.m. Middle-class housing is expensive from 3967 to 4027 eur/sq.m. In the prestigious segment, prices did not change and reached EUR 6,866/sq.m. Lofts became slightly cheaper – from 2,838 to 2,834 eur/sq.m, while cottages rose in price from 2,173 to 2,249 eur/sq.m.

According to “Citus” data, prices in Vilnius adjusted by -0.15 percent during the month. (up to 3376 EUR/sq. m). Since the beginning of the year, they have increased by 2.30 percent.