Price expectations continue to hold despite declining housing market activity
2023-12-20
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), increased by 0.1% in November 2023 (the price index in October 2023 decreased by 0.1%). Overall, the apartment prices in the major cities of Lithuania have increased by 1.2% over the last 12 months (the annual growth in October 2023 was 1.1%).
In November 2023, apartment sales prices in Kaunas, Klaipėda and Šiauliai increased by 0.2%, 0.5% and 0.2% respectively and the average price per square meter in these cities was EUR 1,726 (+4 EUR/sqm), EUR 1,6270 (+8 EUR/sqm) and EUR 1,106 (+3 EUR/sqm). In Panevėžys, apartment sales prices decreased by 0.1% and the average price per square meter was EUR 1,073 (-1 EUR/sqm). In Vilnius, apartment sales prices remained unchanged and the average price per square meter stood at EUR 2,564.
Apartment prices rose year-on-year in November 2023 in all major cities of the country: 0.8% – in Vilnius, 1.9% – in Kaunas, 1.3% – in Klaipėda, 2.9% – in Šiauliai and 1.5% – in Panevėžys.
“Unlike housing market activity, which suffered another downturn in November, price expectations of the population remain quite optimistic. According to the State Enterprise Centre of Registers, in November 2023, compared to October 2023, almost 16% fewer apartments and 24% fewer houses were purchased in Lithuania. In terms of activity, it was one of the worst months in the year. Meanwhile, according to the survey of households conducted in H2 2023 for the Bank of Lithuania, 39% of the respondents thought that home prices would increase over the next 6 to 12 months and only 21% of the respondents thought that they would decrease. The remaining 40% said that home prices would remain unchanged or had no opinion. Compared to the results of a similar survey conducted in 2022 (23% responded that home prices would increase, 4% – that prices would decrease, and 73% believed there would be no changes in prices), there is no prevailing opinion on the housing market outlook this year. Therefore, it may be concluded that even though the activity in the housing market has slowed down considerably, the majority of the country’s population remains calm and does not make any hasty home buying or selling decisions. The changes in apartment prices recorded this year reflect this situation – a stable housing price curve has formed in the course of the year,” noted Raimondas Reginis, Head of Market Research for the Baltic countries at Ober-Haus.