Paint a new image of the real estate market in Lithuania: residents looking for a different home than the previous one

See the growing need for more spacious homes

The quarantine forced the majority of the Lithuanian population to work remotely, as additional space and a suitable workplace at home have become more important than ever. In addition, most of the entertainment and free time have been moved to the house, so the list of housing functions has been expanded. Sigismund Mauricas, chief economist at Luminor Bank, noted in a virtual conference that work and leisure at home showed the importance of space and comfort at home. This, he said, could increase demand for more spacious homes.

“Congestion can also be reduced, as there will be more work from home, fewer trips from the country to the city when there is a workplace, and people will make it easier to make the decision to move to the field.” And the hardest hit will be the small area home purchased for rent. As the tourism sector will not recover soon, the demand for short-term rentals will decrease, ”explained the economist.

In fact, real estate experts say they feel the greatest demand for larger homes or real estate on the road. Antanas Kišūnas, head of the Housing Department at real estate company Ober-Haus, says the quarantine has made people realize how important living space and comfort are to them.

“People realized that being in a quarantine department is difficult, so interest in small residential cottages has increased. There were also situations where people have nowhere to allow quarantine, it’s difficult in a small house, therefore, they were interested and interested in buying real estate for recreation and quarantine, “says A. Kišūnas.

According to the interlocutor, the residents are also interested in the farms on the small real estate beach: “The coast has become attractive because people have realized that this year they will probably not be able to go on vacation abroad.”

Admittedly, A. Kišūnas says trends in the more spacious property suburbs also prevailed before the quarantine. According to him, people choose a larger area in the district, they are determined to accept certain disadvantages to buy a larger area of ​​real estate at a lower price per square.

On the other hand, the interlocutor does not predict that the trend towards more spacious housing in the suburbs can become lasting. He says there is currently an increase in supply in the rental market.

“Of course, everything depends on the economy, because such apartments are generally bought for investment,” emphasizes A. Kišūnas.

As the demographic situation changes, the demand for low-cost housing may decrease

Arnoldas Antanavičius, head of the public institution Realdata, a real estate analyst, agrees with A. Kišūnas and says there was talk of a decrease in demand for small apartments even before quarantine. According to him, such forecasts were stimulated by the demographic situation in Lithuania.

“Even before the coronavirus, looking at the demographic situation, we saw that society was changing fast enough. After the last crisis, there has been a wave of young people across Lithuania since the birth of the late 1990s, who entered to the labor market, they started working in Lithuanian and foreign commercial companies, which expanded and created many new jobs for young professionals. Sometimes he did not need a big house, many things, his rhythm of life was such that everything would be based on an economy shared, go out to eat in the city, not produce at home, so there may be little space, “explains the interlocutor, who continues to grow, create or create. families, and the need for more housing is felt.

“Now the demographic situation shows that in the next 10 years the majority of the population in the main cities will be between 35 and 50 years old. These are already completely different people, they are families with children, they do not need that home. The only hope was that Those small apartments could be rented, but now we see a situation in which such a scenario may be unlikely, since coronavir has seriously damaged the rental market and nobody knows when the borders will be opened, when tourism will recover. ” Antanavičius.

According to the real estate analyst, even with the relaxation of the quarantine, people see the advantages of a bigger house, additional space, countryside and nature, therefore, he predicts that the real estate market in Lithuania should change in the future.

“Even before the coronavirus, we saw that the growth of real estate transactions was faster in homes than in apartments, showing that people are increasingly choosing these homes, and now it will only encourage this segment,” said the interlocutor.

Demand for more spacious homes is a temporary trend

Although the demand for more spacious homes is currently increasing, developers believe that this is a temporary trend, a consequence of the quarantine and the warm period, which will not significantly affect the supply of the real estate market in the future.

Mindaugas Statulevičius, Director of the Lithuanian Real Estate Development Association, assures that the trends in the increase in the supply of more spacious homes and housing in the suburbs can be observed in New York (USA), Hong Kong (China) or other larger, densely populated cities, but not in Lithuania.

“We have spoken in partnership not only with developers but also with the architects our members work with. Of course, there is still little time left before projects are changed, because what is planned is not the designs that are being designed, the changes may be, but not so great. I would not say that the size of the apartments will increase and rise further to the periphery. Because Vilnius is not such a big city, it is not New York or Chinese cities with a high population density, “says the interlocutor.

M. Statulevičius notices another trend: as the population ages, the demand for newly built small homes increases among elderly lone buyers.

“Society is aging and older people need to change their home when they lose their spouse, to a large square foot home. I think this will change and they will look for smaller apartments. Also, a person’s tendency to buy their first house and then keep it for investment will not go away, and that house will more often be smaller in square meters due to its lower cost. I think this trend will outweigh the development in the suburbs. Of course, the projects in the suburbs, which can Having been postponed, they are realistic that they will be resurrected, but they will be unitary, ”explains the director of the LNTPA, adding that the development of real estate projects in the suburbs will be facilitated by the adopted municipal infrastructure development law.

“The law will solve an eternal problem when a developer comes to a new area and has to do all the infrastructure there for him and for other developers who may one day come to that area. It is this law that will determine that if a developer orders the infrastructure, he receives the right to recover taxes from future residents or developers who join those networks. This is very important here, because perhaps some quarters that were not developed because the infrastructure was too expensive, now such projects can be renewed, “says M. Statulevičius.