Annual increase in apartment prices is rapidly slowing down in major cities, buyers in the capital city stalling
The Ober-Haus Apartment Price Index (OHBI) in Lithuania, which records changes in apartment prices in five major Lithuanian cities (Vilnius, Kaunas, Klaipėda, Šiauliai and Panevėžys), decreased by 0.1% in June 2023 (the price index in May 2023 increased by 0.2%). The apartment prices in the major cities of Lithuania have increased by 9.1% over the last 12 months (the annual growth in April 2023 was 12.3%).
In June 2023, apartment sales prices in Vilnius and Klaipėda decreased by 0.2% and 0.3%, respectively and the average price per square meter in these cities was EUR 2,550 (-6 EUR/sqm) and EUR 1,602 (-4 Eur/sqm). In Kaunas and Panevėžys, apartment sales prices increased by 0.2%, 0.1% respectively, and the average prices per square meter stood at EUR 1,723 (+4 EUR/sqm) and EUR 1,058 (+1 EUR/sqm) respectively. Apartment sales prices remained unchanged in Šiauliai and the average price per square meter was EUR 1,078.
Apartment prices rose year-on-year in June 2023 in all major cities of the country: 10.5% – in Vilnius, 8.6% – in Kaunas, 7.1% – in Klaipėda, 4.6% – in Šiauliai and 4.6% – in Panevėžys.
“The level of apartment sales prices in the country’s major cities has remained stable for over six months, so the annual growth rate of prices has been steadily declining and in June fell below the 10% threshold. The current annual growth rate of apartment prices is the lowest in the last two years and is expected to continue to decline rapidly over the course of this year (taking into account the current price trends and the longer-term outlook).
Meanwhile, the housing market remains sluggish and shows no signs of recovery. Activity indicators remain in negative territory, with significantly fewer home purchases than a year ago. According to the State Enterprise Centre of Registers, in June 2023, compared to the same month last year, 18% less older apartments were purchased in Lithuania (the decrease in Klaipėda stood at 10%, in Vilnius – 22%, in Kaunas – 22%, in Panevėžys – 25%, and in Šiauliai – 29%). Despite the fact that all major cities of the country have recorded a negative annual change in the number of transactions, the number of older apartments purchased in June this year in Kaunas, Klaipėda, Šiauliai and Panevėžys was still higher than that in May. Meanwhile, in Vilnius, the trend remained negative, with fewer older apartments purchased in June than in May. This is the third month in a row when the number of transactions of older apartments in the capital city is decreasing. It is very likely that home buyers in the country’s most expensive city are not finding it easy to make the purchase at the moment due to the record high prices and rising interest rates,” noted Raimondas Reginis, Head of Market Research for the Baltic countries at Ober-Haus.