News in English

2013.10.01 11:01

In 2013 Lithuanian real estate market almost reached pre-crisis levels

DELFI|The Lithuania Tribune2013.10.01 11:01

In Vilnius, housing market activity has basically reached pre-crisis levels, yet prices are not increasing quickly. Real estate market currently is at equilibrium, the Baltic Course writes, referring to the news agency ELTA. 

In Vilnius, housing market activity has basically reached pre-crisis levels, yet prices are not increasing quickly. Real estate market currently is at equilibrium, the Baltic Course writes, referring to the news agency ELTA.

Centre of Registers data shows that by midsummer apartment sales in Vilnius increased by 32.6 per cent year-on-year. However, the prices which in the first two quarters of 2013 had increased by 1-2 per cent, dropped by 3.6 per cent in the third quarter.

Donatas Kojala, Head of Sales of Akorus Real Estate, says that such real estate market situation is determined by overall economic situation in Lithuania.

“Housing loan interest are record low, situation in the labour market has improved and Lithuanian economy overall is showing signs of recovery. Therefore, the real estate market is responding to positive changes of internal economy. Especially in the capital, as there is a large concentration of people earning higher than average income,” said Kojala.

As the housing demand is growing so is the supply of new real estate projects – this allows the market to stay balanced in respect of prices. The main cause of price fluctuation is the imbalance of demand and supply.

As there is a balance, writes The Baltic Course, prices are not expected to rise rapidly in Vilnius. Such situation is beneficial not only for the buyers but for the whole market. Increase in prices on its own should not be regarded as one of the primary indicators of a healthy market.

In the third quarter of 2013 slightly more than 80 per cent of the bought housing was old built, while 20 per cent was newly built.

According to Kojala such situation is common for Vilnius.

“Old houses constitute a majority of the housing market in the capital. It is cheaper, thus there are quite more transactions in this segment. On the other hand numerous preliminary sales agreements are concluded to buy newly built apartments. Therefore, in the future this proportion should be expected to change,” said Kojala. 

0