Rapid increase of apartment prices continues and the expectations of sellers are high
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 2.0% in June 2021 (2.7% increase was recorded in May 2021). The annual apartment price growth in the major cities of Lithuania was 13.6% (the annual apartment price growth in May 2021 was 11.6%).
In June 2021 apartment prices in Vilnius and Kaunas grew by 2.1% respectively with the average price per square meter reaching EUR 1,871 (+39 EUR/sqm) and EUR 1,313 (+27 Eur/sqm). In Klaipėda, Šiauliai and Panevėžysapartment prices grew by 1.6%, 1.9% and 1.3% respectively with the average price per square meter reaching EUR 1,290 (+20 EUR/sqm), EUR 875 (+16 EUR/sqm) and EUR 862 (+11 EUR/sqm).
In the past 12 months, the prices of apartments grew in all major cities: 13.7% in Vilnius, 12.5% in Kaunas, 13.1% in Klaipėda, 15.5% in Šiauliai and 16.6% in Panevėžys.
“The apartment sale price increase, which started at the end of 2020, shows no signs of abating, and we continue to record a rapid monthly and annual growth. The expectations of sellers are currently extremely high and this directly contributes to the further increase in apartment prices. In view of the recent rapid increase in residential property prices, many property owners tend to sell properties at higher than the market prices. With the rapid increase in apartment prices, even such offers eventually attract interest and real buyers. However, in this case, depending on the seller’s expectations, the sales process may take longer, for example, 1-2 months or 3-4 months. Despite the highly active residential property market in our country, buyers do not easily accept high prices and are always looking for alternatives. Only if they find no alternatives and see that prices continue to increase, do they return to the negotiating table with the property owners.
The latest figures show that the overall level of the residential market activity in the country is gradually cooling off and it is very likely that the next few months will be quieter than April-May this year. So the sale process for overly optimistic home sellers may take much longer than planned,” Raimondas Reginis, Market Research Manager for the Baltics at Ober-Haus, said.