Wages are rising, but the threat of war is slowing: Here’s what happened in the housing market last month | Business

The market is gradually coming back to life

In March 2024, buyers purchased 269 newly built apartments worth 43 million. euros, according to the data collected by Hanner analysts. In March, 25 terminations of contracts were also recorded in the Vilnius real estate market. Accordingly, 313 apartments were sold in March of last year, and 152 housing purchases were agreed upon in 2022.

In the first quarter of this year, 789 apartments were sold on the Vilnius market (291 in January, 229 in February, 269 in March), which is 20 percent. more than last year, when buyers purchased 657 apartments.

Due to different calculation methodology, the data available by real estate companies is slightly different, but the trend is the same.

According to the data of the real estate development company “Realco”, in March of this year, 234 dwellings were sold in the primary real estate market of Vilnius and 20 contract terminations were recorded. Compared to February, when 195 dwellings were sold, sales increased by about 20 percent, but compared to March of last year, when buyers purchased 343 dwellings, they decreased by almost 32 percent. At that time, the stock of housing in the capital’s primary real estate market increased during the first quarter of this year.

“During the first quarter of 2024 in Vilnius 758 total sales were recorded in the primary housing market. This is the best quarterly result since the second quarter of 2022. It can be said that there is a gradual recovery of the market, although the numbers are only for 2018. March was the busiest period in two years. Such a result is positive, but it should be borne in mind that the results of the month are influenced by both new projects and their pre-sales, as well as the end of construction, when the sales process is completed”, says Tomas Sovijus Kvainickas, Head of Investments and Analysis of Inreal.

In March 2024, “Inreal” recorded 312 total sales (336 new agreements, 24 returns) in the primary housing market of the city of Vilnius – 54 percent. more than in February 2024 (respectively: 202, 243, 41), and 126 percent. more than in March 2023 (138, 260, 122).

According to the preliminary data of Citus analysts, 307 transactions for the purchase of new housing (apartments and cottages) were concluded in Vilnius during March. According to this result, this is the best month even since last February.

“In March, new housing sales in the capital remained at a similar level as in other months of this year. The entire first quarter of the year, compared to the same period last year, was also not distinguished by greater activity – 632 dwellings were sold in Vilnius this year, while buyers purchased 638 dwellings last year. The reasons remain the same – although wages and savings and bank deposits of residents are increasing, many people are still deterred from the decision to buy a home by the high interest rate, and the feeling of instability and insecurity caused by increased political tension in the region due to Russia’s war in Ukraine also contributes,” comments ” Realco’s sales director Marijonas Chmieliauskas.

Šarūnas Tarutis, head of investment and analysis of creative real estate projects and regional development company “Citus”, confirmed that recently there has been an increase in discussions about the possibility of a direct conflict between NATO and Russia.

“Such messages, on the one hand, do not add determination to buyers, but I believe we will avoid a greater impact on the housing market.” We must understand that inciting threats and imminent danger is a part of the hybrid war in which we have been living for more than ten years – a psychological operation, the effects of which must be stopped by educating, explaining and calming, not by strengthening that sense of danger,” emphasized Š. Tarutis .

The housing warehouse is filling up

Although the first quarter of the year was not characterized by greater buyer activity, the housing stock increased.

According to “Citus”, the supply in Vilnius continues to grow consistently: at the end of February, it amounted to 4,789 units. of new apartments and cottages, at the end of March – 4,830. During the month, these areas were supplemented with 247 new dwellings in three new projects and one stage of a previously started project. During the quarter, 1,031 new apartments and cottages were “supplied” to the market.

Since the beginning of the year, when the “warehouse” of the primary market consisted of 4,322 units in December, the assortment has grown by almost 11.8 percent. During the year – 8.22 percent: in March of last year, Vilnius residents chose from 4,463 housing units. True, according to Citus analysts, about a fifth of Vilnius’ supply is illiquid – it has not received buyers for two years or more.

According to M. Chmieliauskas, in the first quarter of this year, the warehouse was filled with new projects, mostly economy and middle classes, but it is still too early to draw reasonable conclusions that this is a sign of long-term market activation.

“Realco” calculates that in the warehouse of the primary real estate market of Vilnius in March, buyers could choose from 4,174 apartments located in 130 projects. In February, there were 129 projects with 4,074 housing units on the market, and in January, the number of projects and housing stock were even lower, at 126 and 3,729, respectively.

In the first three months of this year, according to Realco, 1,062 homes entered the market, located in 12 new projects or their phases. At this time last year, 15 new projects or phases had entered the housing stock during the same period, but the number of new homes was lower at 894.

According to “Realco”, currently 995 homes under construction, 745 under construction and 2434 built houses are offered to buyers looking for a home in the capital.

The largest offer is two- and three-room apartments, which are also in demand among buyers. Two-room apartments accounted for the largest share, about 35 percent, of all new homes sold in the capital during the first quarter.

According to Hanner, 334 newly built apartments were offered to the Vilnius market in March. In total, buyers in the capital can currently choose from 4,249 apartments offered by developers on the primary market.

Price changes

As in previous months, price changes are more influenced not by pricing but by structural changes.

According to Inreal, 61 price increases and 20 price decreases were recorded during the month. Due to the new supply and sales of more expensive housing in the economy class segment, housing prices here decreased from 2,791 to 2,763 EUR/sq.m.

Middle-class housing became cheaper from 4,089 to 3,967 Eur/sq.m., while in the prestigious segment, prices increased from 6,827 to 6,866 Eur/sq.m. Lofts became slightly cheaper – from 2,846 to 2,838 Eur/sq.m., while cottages went up in price from 2,157 to 2,173 Eur/sq.m.

“Hanner” indicated that the prices have remained unchanged for 18 months – at the end of March, the average of vacant apartments for 1 sq.m. the price of the metro was EUR 3267.

According to “Hanner”, in April, the prices of new apartments in the average segment range from 3150 EUR/sq.m. m up to 3700 EUR/sq. m, in the prestigious area the price exceeds 3700 EUR/sq. m. Economic housing buyers are offered apartments whose market prices reach up to 3150 EUR/sq.m. m.

According to Citus, prices have changed little – their change continues to hover around 1 percent. limit Last month it recorded 3381 Eur/sq. m average price of apartments on offer, in February a “square” cost EUR 3394 (0.38 percent more). Although the price increase has reached 2.45 percent since the beginning of the year, within 12 months prices increased by 0.36 percent.