«The apartment you buy today will cost more tomorrow.» An expert from the Capital Smart real estate agency on the situation in the Lithuanian housing market
Lithuania has become one of the sites where international companies are choosing to open their offices, relocating their employees to the major cities of the country. In the previous article, together with the head of the Capital Commercial office, we discussed how to find commercial premises to accommodate a company and what the business needs to know in the first stages of the relocating process. Once the office has been found, it’s time to think about employee housing. And here we will be assisted by an expert — the managing partner of the Capital Smart real estate agency Arunas Praniavichus.
In the near future, the situation will only heat up
According to official data, over the past year the value of real estate in Lithuania has increased by about 14-21%. At the same time, surprisingly, prices in the primary and secondary markets have practically equalized. In major Lithuanian cities, house prices rose by an average of 20%: in Vilnius — by 22%, in Kaunas — by 20%, and in Klaipeda — by 18%.
According to the realtor, the average «cost of a square» in the capital is now €2,500, and there are offers of €4,500 — €5,000. A year ago, you could buy an apartment in Vilnius for €1000 per square meter; two years ago, for €850. Kaunas is not too far from Vilnius, and there the cost of a square meter varies between €1200 and €3500. In other major cities like Klaipėda, Šiauliai and the seaside resorts of Palange and Šventoi, prices per square meter fluctuate between about the same values.
Arunas Praniavičius, managing partner of Capital Smart, assures us: these prices are far from the limit! According to him, despite the growth, more and more players are appearing in the market and are ready to buy real estate right now. Moreover, more and more offices of various international companies have opened in Lithuania, which means that interest from foreign investors is also growing. Demand far exceeds supply, and the situation is likely to heat up in the near future.
— At the end of February 2022, the whole world changed, and these transformations affected most European countries. The Lithuanian real estate market reacted to the events in Ukraine quite quickly: at first, most market players were frightened, and froze waiting without taking any steps. But after just two or three weeks, buyers began to return, because people see buying real estate not only as an opportunity to save money, but also as a profitable investment.
Of course, if we compare the number of real estate transactions in January 2022 and now, it will be obvious that it has decreased by about 40%. However, we see the flow of buyers and sellers returning, and the market gradually stabilizing. Already in April, we have seen an increase in the number of transactions, and the drop will no longer be 40%, but just 20% compared to the beginning of the year. I hope that in the summer the market will return to its normal state, to what is typical for our country.
At the same time, it is now quite difficult to name the average cost of a square meter of housing in Lithuania. This is especially true in the primary market. We see the cost of construction growing real-time, and the prices for new buildings in Lithuania that were profitable for the developer yesterday, now will, at best, bring zero profit. Most construction materials were imported to Lithuania from Russia and Belarus, but now this route is closed, which means that developers will have to buy more expensive materials from Europe. Some developers simply «froze» their sales, choosing tactics of expectation — nobody wants to sell housing to lose money, understanding that it is simply imposible to accurately forecast price levels. In this uncertainty, one thing is certain: prices will rise! Which means any real estate you buy today is going to cost more tomorrow. This applies to both residential and commercial facilities.
The secondary market is very sensitive to the situation with new buildings. The value of real estate in large cities is growing quite rapidly. We are feeling a shortage of supply, which means that now the seller determines at what price to sell their apartment or house. Besides, those apartment owners who have decided to make repairs in their housing were unpleasantly surprised by the prices for building materials and, if these apartments then go on sale, their cost also will be higher than earlier.
«The Opinions of international companies on business relocation are divided»
— International companies consider Lithuania as one of the main sites for business relocation. Given the rapidly rising housing prices, is there any point in relocating your business now?
— The trend for business relocation to Lithuania started a few years ago. My colleague Yulia Tislenko that there are really many advantages to doing business in Lithuania. Here you get preferential taxation for the first few years of the company’s existence, the concept of a free-trading-zone in 7 cities of Lithuania, and the possibility of obtaining a residence permit after starting a business in the country, as well as a truly European standard of living at relatively low prices.
That is why forward-looking businessmen hurried to open offices of their companies in major Lithuanian cities and even to move some employees to their new permanent residence. However, this year I have seen the opinions of such companies become divided into diametrically opposed ones. Some think that, given the rise in real estate prices (including rent), it makes no sense to relocate your business to Lithuania now — it is too expensive. And others are sure: right now is when you need to do it because , as I mentioned before, tomorrow it will be more expensive. And the bonuses and privileges that the business and its employees will receive in Lithuania now will more than cover the costs that they will incur to relocate.
As in many countries of the Baltic States, there was a real «boom» in the Lithuanian housing rental market, which means that you can’t do without the help of a specialist. Together with the Capital Smart professional team, we help companies find housing for their employees in parallel with the search for commercial premises carried out by our colleagues from Capital Commercial. And it concerns both the purchase and renting of real estate.
As for rentals, a one-bedroom apartment in Vilnius can be rented at a price of €700 per month. In Kaunas, Klaipėda and Palanga, from approximately €500–€600 per month. Compared to January, prices have already increased by 20% on average. An interesting feature, unusual for foreigners, is that in Lithuania, the ads for apartments for rent indicate the cost of renting one square meter. The utility charges are also calculated separately and are approximately €100–€130 in summer and €300 in winter.
In Vilnius, not only coworkings, but also colivings, are quite popular. These are such apartments like, for example, communal apartments: the tenant rents a room, and the bathroom, kitchen and living room are common to all tenants. Such housing, of course, is cheaper. You can find a room in the coliving, taking communal expenses into account, for €200 — it all depends on the location.
The specialists of our company had a successful case of settling in more than 100 families at once — they were employees of one of the IT companies that recently opened its office in Vilnius. And now we have come to the fact that we are looking for 80 to 200 apartments at the same time.
Apartments in Lithuania for any budget. An expert’s personal top
Practically in the center of Vilnius, there is a one-bedroom apartment for sale with a total area of 26.36 sq. m. These are new apartments with modern design renovations, fully furnished and equipped with all the necessary appliances.
The apartment is located on the ground floor of a nine-storey building. The new building was commissioned in 2021, which means it meets all modern standards and requirements in terms of energy and heat efficiency. Each apartment is equipped with a recuperative ventilation system, and the heating is central, with a collector system.
Just a few hundred meters away from the house is one of the most beautiful places of the capital: the Verkiai Regional Park. Just a light stroll, and you will find yourself on the banks of the river Neris, the Valacampiai beach or Žirmunai. The nearest school is about 250 meters away, and the hospital is 1.2 kilometers away. Public transport is just 200 meters away.
According to the expert, this is a great option for one person or a young family at a favorable price.
In one of the most promising areas of Vilnius, Šnipiškės, a two-bedroom apartment with a total area of 44.58 sq. m is up for sale. The apartments are located on the third floor of a nine-storey building built in 2021.
It is also a completely new apartment with modern design renovations. The future owner won’t have to worry about anything — the arrangement of the apartment and the highest quality materials were carefully thought out. The apartment is fully equipped with all necessary appliances and furniture. The accommodation consists of a spacious bedroom, a large living room combined with a kitchen, a combined bathroom and a large balcony with panoramic views.
The house is located in the city center, so you can easily get to work and university. There is a well-developed infrastructure of services and shops. Nearby there is a sports club, a newly reconstructed bicycle lane and treadmill along the river and beautiful walking alleys. Very soon, more parks and recreation areas will appear near the house, like the Japanese Garden, Kintai Square.
Those interested in luxury real estate can consider buying an apartment in the Old Town. This is the heart of Vilnius, where modern comfort is tightly intertwined with the history and identity of the city. There is an apartment for sale with a total area of 195.76 sq.m . The main advantage of this property is the stunning view that opens from its terrace. From here, you can see the most famous sights of the Old Town as if they were on the palm of your hand.
The apartment is located on the top floor of a five-storey brick house built in 1996. Its high ceilings and panoramic windows create a feeling of airiness and lightness, and the light modern tones in its interior only emphasize the original beauty of these apartments.
The accommodation consists of two separate bedrooms, a spacious living room, a modern kitchen, a spacious dressing room, two separate bathrooms and a terrace. It offers you designer renovations and modern furniture, a fully equipped kitchen with the latest technology and, at the same time, a cozy space — everything is made for the comfort of the future owner.
For those buyers who are accustomed to appreciating laconic luxury, this apartment in the center of Vilnius, which is on sale for €800,000, may be the best option.
This is a four-bedroom apartment with a beautiful view of the most stunning sights of the city. The apartment consists of a spacious living room with kitchen area, a bedroom, a nursery, a study, and two bathrooms.
The high ceilings, panoramic windows and light colors of the interior seem to make the apartment as airy and light as possible, and its massive furniture and classic notes make the interior thorough and down-to-earth.
It is located on the 16th floor of an 18-storey brick house built in 2007. The total area of the apartment is 134.13 sq.m. The house is just a few minutes’ walk away from the central «artery» of the capital, Gadiminas Avenue. It offers a well-developed infrastructure: there is literally everything that is necessary for life.