Housing prices increase faster than the general price level in the country
2016-08-11
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 July 2016. The annual apartment price growth in the major cities of Lithuania was 4.8% (the annual apartment price growth in June 2016 was 4.7%).
In July 2016 apartment prices in the capital grew 0.5% with the average price per square meter reaching EUR 1,383 (+7 EUR/sqm). In the past 12 months, the prices of apartments in Vilnius increased by 6.1% and since the last lowest price level recorded in May 2010 prices have increased by 19.8% (+229 EUR/sqm). Apartment prices in Kaunas, Klaipėda and Šiauliai in July grew by 0.1%, 0.1% and 0.7% respectively with the average price per square meter reaching EUR 971 (+1 EUR/sqm), EUR 1.003 (+1 EUR/sqm) and EUR 589 (+4 EUR/sqm). In Panevėžys apartments prices remained stable and were the same as in last month – 547 EUR/sqm.
In the past 12 months, the prices of apartments grew in all major cities: 6.1% in Vilnius, 3.3% in Kaunas, 2.7% in Klaipėda, 5.4% in Šiauliai and 3.2% in Panevėžys.
“Recently, the biggest cities in the country and especially in the capital have seen continuous increases in apartment prices. From the beginning of 2013 – when the lowest average apartment price for the five biggest cities in Lithuania was recorded – until this July, apartment prices have increased by 10.8%. That said, we should also consider the nominal prices for apartments in relation to changes in the prices of other goods and services in the country. The official data show that from the beginning of 2013 until this July inflation, measured by the Harmonised Index of Consumer Prices, amounted to barely 0.2%. Thus, the actual apartment price change (after eliminating inflation) in the biggest Lithuanian cities during this period basically corresponded to the nominal growth and amounted to 10.5%. Consequently, apartment prices increased much faster than the officially recorded basket of consumer goods and services in recent years. Nevertheless, employee earnings rose even more than the housing prices: during the last three years, net salaries in Lithuania increased by 16.5%. This means that, despite increasing prices, housing affordability is still on the rise in Lithuania,” said Saulius Vagonis, head of the Valuation and Analysis Department at Ober-Haus.