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Mindaugas Statulevičius, president of the Lithuanian Real Estate Development Association (LNTPA), noted that people have always bought houses from drawings, only now their prices may change.
“Some projects only have building permits, but no contracts have been signed with the contractors who are going to build. And the cost of construction has gone up by about 20 percent, so housing will be more expensive. Developers already they are raising the price or refraining from selling until they know how much it will cost to build.
However, once the preliminary contract is signed, the house price should no longer change. This agreement is already binding on both parties. And reputable developers will not want to lose reputation and good relationships with buyers. It is likely that the price will be higher from the beginning, in the preliminary contract, but it will not change during the construction process ”, said the president of LNTPA.
However, according to M. Statulevičius, lesser-known builders, who have less experience or do not value their name in the market, can then raise the price to buyers, even if they have already signed a preliminary contract.
“They will say that the construction price has gone up, so either you have to pay more or you have to terminate the contract. Probably the buyer will have to pay a fine of several thousand and the contract will be terminated. And the developers will keep looking for buyers who agree to pay. more. Certainly, these cases can occur.
Therefore, buyers should carefully conclude the preliminary agreements and ask if the price will not change ”, warned the president of LNTPA.
According to him, it is also important to note that some contracts may not be implemented at all, because contractors will abandon projects if they cannot build at the estimated price.
“Some projects may be delayed. However, developers must inform buyers so they can decide to wait or look for a home in another project,” said M. Statulevičius.
The housing stock is emptying
Šarūnas Tarutis, head of investment and analysis at the Vilnius and Kaunas housing project management company Citus, stated that at the end of June, the new Vilnius housing warehouse consisted of 3,898 houses and cabins:
“It was not so low not only last year or the year before, but also in 2017. The market specialist qualifies the situation as unenviable: people have almost nothing to choose from.”
According to the interviewee, in the existing warehouse, without a doubt, the absolute majority are projects still in development, which cannot be inspected and “touched” live.
“It just came to our notice then. People set the current market price with a reserve agreement and developers start investing in construction with the confidence of future residents.
This is a guarantee for both parties, but the most important thing is to choose a reliable developer who will not be able to dive into the bushes in the event of some unexpected market shock, “said the company representative.
According to him, there are now cases where the increase in prices changes even the terms of the framework contracts. But the great developers who value their reputation and image do not allow it.
There is nothing to choose
Real estate broker Paulius Banevičius stated that the supply of newly built housing is not great, therefore it is natural for people to choose housing from the drawing.
“The most popular are two-room apartments, which people buy both for investment and for living. However, their price can vary greatly depending on the neighborhood. A 50-square-meter apartment in Vilnius costs on average around 125 thousand. euros.
In most cases, this type of housing is not fully equipped, so it still takes extra money to install it, ”said the real estate broker.
According to him, buyers most often choose apartments that are not fully equipped, because they try to save, but they are not always successful.
In addition, most of the time the developer does not even offer fully equipped homes, so the buyer has no other option. Very few in the housing market are fully equipped, ”noted P. Banevičius.
Buyers fell?
Arvydas Avulis, the head of the Hanner company, assured that the houses can be bought not only from the drawing, but that they are already built, only that his choice is smaller.
In addition, we have many more buyers who choose dwellings from the drawing. However, it is important to note that houses are not sold on a sheet of paper alone. Each construction project is in different stages.
Some projects have only foundations, others, only the roof is covered. There are also fully completed projects that the buyer can see, buy and live there immediately, ”said the director of the company.
Avulis said she didn’t realize the pandemic would change buyers’ habits and they would look for more spacious homes.
“Most people are convinced that the pandemic will end and we will return to normal life. What is happening now is temporary. Normal life is only temporarily interrupted. Therefore, we did not notice any special requirements for housing.” said the head of the company.
However, according to him, as prices rise, less-equipped homes are being sold. Any price increase reduces the circle of potential buyers. According to A. Avulis, with the increase in the prices of building materials in general, the number of buyers began to decrease.
According to Šarūnas Tarutis, Head of Investment and Analysis at Citus, it is normal for buyers to decrease in the summer.
“In the first month of summer, the market is slowing down a bit – we’ve been watching this for many years. It seems to be the month that most people, or at least those who buy a home, are on vacation. We observe a very similar low tide every year in December, when people are most interested in preparing for the most beautiful holidays of the year.
However, June this year was the best of the last three years: 484 new apartments and cottages were booked this year, 311 last year and 385 last year ”, Š. Tarutis.
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