Apartment prices have increased fastest in Vilnius, Šiauliai and Panevėžys since recession
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 0.4% in September 2019. The annual apartment price growth in the major cities of Lithuania was 6.3% (the annual apartment price growth in August 2019 was 6.4%).
In September 2019 apartment prices in the capital grew 0.5% with the average price per square meter reaching EUR 1,584 (+7 EUR/sqm). Apartment prices in Kaunas, Šiauliai and Panevėžys in September grew by 0.6%, 0.2% and 0.3% respectively with the average price per square meter reaching EUR 1,130 (+7 Eur/sqm), 721 (+2 EUR/sqm) and EUR 703 (+3 EUR/sqm). In Klaipėda no price changes were recorded and average apartment price remained the same as in August – EUR 1,116.
In the past 12 months, the prices of apartments grew in all major cities: 5.9% in Vilnius, 6.5% in Kaunas, 4.9% in Klaipėda, 11.2% in Šiauliai and 11.5% in Panevėžys.
“The apartment sales price index in the five major cities of the country shows that the prices of apartments have increased for 56 consecutive months. Speaking about specific cities, the lowest prices of apartments in the country’s capital were last recorded in 2010 and in Kaunas, Klaipėda, Šiauliai and Panevėžys – in 2013. Since then, a moderate and stable increase in the prices of the apartments has been recorded in these cities.
What relative increase in the value of the residential property could city dwellers expect if they have purchased real estate at the lowest prices of the decade? If an apartment was purchased in mid-2010 in Vilnius for the then market price and the apartment has not essentially changed its properties (e.g. no improvements have been made to the apartment or the building, and, on the contrary, there is no heavy wear and tear of the apartment or the building), i.e. the apartment has remained in the same condition as it was at the time of acquisition, its price today would be 37.2% higher (on average) than that at the time of acquisition. Similarly, if the apartment was acquired in Panevėžys, Šiauliai, Kaunas and Klaipėda, its sales price today would be, respectively, 36.5%, 32.5%, 21.7% and 16.5% higher than that in 2013.
As we can see, statistically the highest increase in value has been recorded in the largest and most economically active city in the country where after the recent recession the property prices started their way up the earliest. The percentage increase in apartment prices in Panevėžys and Šiauliai is not far behind. Compared to the remaining major cities, due to lower price levels of homes in Panevėžys and Šiauliai it is much easier to purchase residential property here, whereas the volumes of construction of new multi-apartment buildings remain symbolic. In Klaipėda the housing market has been most affected by the latest recession. The apartment prices here plunged most among the major cities and there was a huge stock of completed, but unsold apartments in the primary property market, which determined much more cautious approach of both the residents and developers to the prospects of the housing market in Klaipėda. As a result, the smallest apartment price increase has been recorded since,” Raimondas Reginis, Research Manager for the Baltics at Ober-Haus, said.