July 17, 2018. Vilnius. In the first half-year of 2018 the real estate (RE) market maintained positive moods and good liquidity rates although the growth was slower. An increase in the new housing segment reflects the previous sales made by developers that are likely to be at the peak and the forecasts for the rest of the year are not very favourable. Vilnius and Kaunas showed the major activity in business centre and trade segments.
“Stable economic development and higher wages promote Lithuanians to look at the future more optimistically. Growing activity of industry, exports, new investments, and labour productivity in the country make us be more positive. It reflected in lending statistics: in the previous half-year residents’ housing loans and consumer credit portfolio were growing, respectively, by 8 percent and 5 percent. In fact, it is likely that borrowing rates should become slower in the future due to the normalization of monetary policy adopted by the European Central Bank”, – stated Tomas Kipišas, the Broker of Financial Markets Division at Šiaulių Bankas.
Residential RE segment
In the first half-year of 2018, the sales of old construction apartments in Vilnius have remained stable in comparison with the same period in 2017, i.e. 3,400 apartments were sold. Meanwhile, there were more than 2000 primary-market or newly-built apartments sold, i.e. 27.5 percent more than last year. “However, it should be noted that this impressive number was mostly resulted by the “accumulated” previous sales made by the developers in the primary market”, – stated Robertas Žulpa, the Analyst of INREAL Group. According to him, currently the trends are not at the very best in Vilnius primary housing market: “During the first half-year of 2018 the developers sold 1,670 and offered 1,590 apartments for the new market. Respectively, it is 15 percent and 23 percent less than last year. On the other hand, the liquidity rate of Vilnius housing market still remains good, i.e. 1.3, what is reflected in stable prices”, – stated R. Žulpa.
In the first half-year of 2018, the growth of housing transactions in Kaunas was slowing down. One of the reasons is the increasing popularity of private houses/cottages segment. In comparison with the corresponding period last year, there were 415 (by 22.0 percent more) of private houses/cottages purchase-sale transactions made in the latter half-year. Kaunas primary housing market was also slowing down. The liquidity rate went up from 1.6 to 1.7. Nevertheless, the prices of new housing were growing in all segments.
In the first half-year of 2018, the sales of apartments in Klaipėda was slower, meanwhile the market of private houses/cottages went up in comparison with the same period last year. The builders in the primary market tried to enliven passive consumers by offering more new housing than a year ago.
Commercial RE segment
Due to favourable business and economic environment, currently the segment of offices is very active and liquid, and the demand for modern offices is particularly high. “Regardless of high development paces, the demand for modern business centres in the capital city is particularly high, and almost the entire new area is taken up. During the first half-year of 2018 the total vacancy rate in Vilnius has decreased from 5.4 to 3.7 percent, and is the lowest in Europe”, – stated R. Žulpa.
During the first half-year of 2018, the retail trade volumes increased by 9.5 percent, in comparison with the corresponding period last year. The expansion of warehousing sector is one of the most sluggish in the country, although the competition is not significant, the prices tend to grow, and the payback period is not worse than in other commercial projects.
Modest regulatory changes
“The year 2018 has begun without any significant news in the laws, and changes in legal regulation were rather modest and intended to harmonisation of regulation with other fields or EU legislation. However, even though calm moods prevailed in the legislation, we have received at least two important news this half-year: the decision, adopted by the European Court of Human Rights in the case Tumeliai vs. Lithuania in the beginning of the year, significantly changes the extensive case law in the field of arbitrary construction, meanwhile, the solutions of the new general plan of Vilnius city, which became publicly available in late half-year, make us reconsider the future development plans and opportunities in Vilnius”, - stated Simas Paukštys, Associate at Law Firm COBALT.
INREAL Group, Šiaulių Bankas and Law Firm COBALT are preparing reports to present the most relevant trends of Lithuanian economy, real estate market, and law since 2016.
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INREAL is a trademark of an idea, which gives spark to unique projects, basis for professional services, and added value to businesses, clients, and partners. INREAL positions creativity as a core value in the dynamic business world. INREAL Group, which consists of: UAB “Inreal valdymas”, UAB “Inreal”, and UAB “Inreal GEO”, provides probably the widest range of real estate services in Lithuania. Currently they have over 90 employees working for them in 11 cities in Lithuania. The company has engaged in business operations for over 20 years and implemented more than 50 real estate projects of various purposes, which received recognition and awards at contests not only in Lithuania but on an international scale as well. In 2015/16, 2016/17 and 2017/18 Inreal Group was named as the National Winner during the prestigious European Business Awards.
More information:
Rūta Merčaitienė,
Head of Marketing and Communication at INREAL GROUP
+370 611 29 779 ruta.mercaitiene@inreal.lt
www.inreal.lt