November 12, 2013. Vilnius. Today at the brokers forum, organized by the Lithuanian Association of Real Estate Agencies (LNTAA), Arnoldas Antanavičius, the Manager of Consultations and Analysis Department of Inreal Valdymas, stated that the year 2013 has made essential changes in the strategies of many real estate (RE) developers of the country. Sensitively responding to the changing needs of housing purchasers, the developers successfully avoided problems with project realization. In the three quarters of 2013, 981 economic class apartments and 673 mid-class apartments were sold, i.e. respectively by 77 and 92 percent more than in the corresponding period of the previous year. Meanwhile the sales of prestige class apartments decreased by 31 percent.
In the three quarters of 2013, the development and sales of 32 new apartment house projects were launched in Vilnius. In comparison with the corresponding period in 2012, it is possible to state that the geography of residential RE project development has change little, because the most popular micro-regions for the development have remained the same: Pašilaičiai, Santariškės, Pilaitė. On the other hand, according to Inreal analysts, contrary to 2012, this year the development of new projects was more active in the centre and the southern part of the city.
“Analysing the relation of demand and supply in different micro-regions it becomes obvious that the situation in the majority of them is much more favourable to developers than in the previous year”, – stated A. Antanavičius – “If Naujamiestis had been the only micro-region, where the amount of new construction apartments exceeded the supply, for nine months of 2012, then this year the trend is observed in almost all micro-regions. Thus, in many cases the developers do not face with realization problems, and one can assume that today housing segment investors offer housing to potential purchasers, corresponding to their needs”.
Analysing each segment separately, in three quarters of 2013 the liquidity of economic and mid-class reached almost 7 percent, i.e. by 2.3 percent more than in the corresponding period in 2012. This rate means that 15 months would be sufficient to sell out the existing supply in these classes. Meanwhile the liquidity of prestige class decreased to 4.6 percent, or it will require almost 22 months in order to be sold out.
According to A. Antanavičius, the existing sale trends in the market promote developers to invest into economic and mid-class projects more. The statistics of the last quarter of 2013 show that the economic class projects in Vilnius made up almost two thirds of the whole new supply. More that a third is represented by mid-class apartments, while the development of prestige class projects was minimal.
Analysing housing projects under the construction type, it is clear that low-rise construction projects are being developed increasingly less., and this segment is losing ground to the multi-storey construction projects. Although two years ago low-rise RE projects had been particularly popular and was characterised by higher liquidity rate than the multi-storey construction segment, today the liquidity rate is higher in the latter. Such trend can be reasoned by changed structure of demand – there are more economic class purchasers in the market, purchasing apartments in multi-storey construction segment, because low-rise construction segment is related to higher class housing. The data of the last quarter of 2013 show that the developers have further reduced investments in low-rise construction segment.
Regardless of the fact that economic class segment is dominating in Vilnius new construction housing market, higher energy efficiency class projects are being built increasingly more. This is one of the essential rates in the eyes of potential purchasers. This is confirmed bythe liquidityrates.
The ongoing changes in Vilnius RE market reflect in price statistics. “Although in 2013 the average price in different segments has increased: in the economic segment - by about 1 percent, in the mid-class segment by about 7 percent, and in the prestige class – by about 3 percent, the common average price of new construction apartment is less about 8 percent than a year ago, i.e. this year an average purchaser bought an apartment, which cost about LTL 287,000”, - stated A. Antanavičius. Meanwhile last year the price was about LTL 312,000. The analyst explains such decrease in average price by the increased number of purchasers of economic class housing in the market, who bought cheaper and smaller apartments. The average area of an apartment, which was bought, has decreased from 60 sq. m. to 58 sq. m., and the average price per square meter has decreased from LTL 5,200 to LTL 4,930. The fact, that this year Vilnius new construction apartment market has more economic class purchasers, is also confirmed by the fact that about 80 percent of transactions do not exceed LTL 325,000 Lt for an apartment. There were 70 percent of equivalent transactions made in the corresponding period of 2012.
In conclusion, it is possible to state that today economic and cost-efficient housing is dominating in Vilnius residential market.
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