The real estate market ended the summer successfully, but important changes are noted

“The results of the new real estate market for August are ambiguous. On the one hand, they are better than last year and similar to 2019. On the other hand, in mid-2020, the market was just beginning to adapt to living in quarantine conditions, and the momentum in the first half of 2021 was unexpectedly strong. It is important to warn about the reasons for the decrease in market activity due to the vector of changes: if the market is balancing and returning to a normal level, or if such a decrease indicates a possible further cooling of the market, so it is better Prepare ahead of time. I think the change in client behavior was mainly influenced by the increase in prices and the actual decrease in options, which allowed the market to recover after the last 12 particularly active months, ”says Tomas Sovijus Kvainickas, Head of Investment and Inreal Group Analysis. .

According to him, since the beginning of the year, prices for new homes have risen by an average of about 20%, the choice has decreased from more than 4,500 apartments at the beginning of the year to 4,000 in the middle of the year, adding cabins. The changes were also affected by the doubling of the number of apartments built and the exhausting “spring effect” – almost 8,000 homes were bought in the capital in the last 12 months – double the usual, which more than offset the decrease in mid-2020. At the beginning of the year, between 25 and 30 percent of the proposed homes were built, currently between 10 and 15 percent.

It is also possible to talk about changes in the structure of the supply, its dynamics in different neighborhoods, classes and size of the house. These changes are quite difficult to quantify, since properties are not just square meters, the number of rooms or neighborhoods in the broadest sense. The appearance of buildings, house planning and engineering solutions are also important, ”says TS Kvainickas.

August was quite favorable for the new housing market in Vilnius. The purchase of 470 homes in Vilnius was agreed (483 new deals, 13 rescinded and 27 cabins between sales, which were not included in the statistics until July 2021). This is 21 percent. more than in the same period last year (412 agreements, 24 cancellations, total – 388), when the market recovery was already registered after the first quarantine, but 15%. less than in July this year (565, 15, 550 respectively). Changes in market activity can be assessed from various perspectives. Compared to the results of the first half of the year, there is a clear decrease in market activity, but the results for August 2021 correspond to the previous record year of 2019 (total result – 458). For the first time since 2020 in November, buyers in the capital were offered more homes than they bought. In August, 5 new projects or their stages were included in the observations, in which 542 new objects were offered to buyers, 10 percent. more than last month (494) and even 9 times more than in the same period last year (60). At the end of the month, the supply of new homes increased to 4,098 objects (of which – 350 cottages). As buyer activity decreased and the quantity of supply increased, the market equilibrium indicator increased from 0.63 to 0.69. If the August trends continue, the market is likely to balance out by late fall. Symbolic price increases were recorded in all segments, more significant changes, only in individual projects. Currently, new economy class apartments cost around 1977 Eur / m2, middle class – 2659 Eur / m2, prestigious – 4015 Eur / m2, lofts – 1608 Eur / m2, cabins – 1491 Eur / m2. mm About half of all sales were economy class homes and about a third were medium-sized.

An agreement was reached for the sale of 88 homes in Kaunas (92 agreements in total, 4 agreements canceled, 9 agreements and 1 cancellation in the cabin segment). This is 21 percent. better result than in July of this year (74 agreements, 1 cancellation, 73), but 6%. worse than in the same period last year (97, 3, 94, respectively). On the other hand, the indicators for August 2020 were significantly influenced by the launch of a new project with low total costs. Meanwhile, in August 2021, lofts accounted for just 8 percent. all agreements. Comparison of the results with August 2019 (72 agreements) shows growth. In August, Inreal included 3 new projects or their stages in the observations, in which 109 homes are offered to buyers, significantly less than in the previous summer months (215 in July and 364 in June). However, the new offering outsold the sales, and there are currently 1,376 homes to choose from on the market (including 140 cabins). Due to the rapid growth in supply, the market equilibrium indicator – 1.33 – for the second month in a row shows the emerging buyer’s market. Although house prices fell slightly in August, it is not possible to say that this is a consequence of the market cooling. Rather, changes in the supply structure. Negative price changes are recorded in only a few (newer) projects, while in others, prices increased in August.

The results for the city of Klaipeda are ambiguous. In August, 51 agreements were registered in the port city (there were no cancellations), but 37 agreements were finalized a little earlier in the project’s market launch, which was included in last month’s observations. In this project – 85 homes. Judging exclusively by the August results, they are modest, corresponding to the situation of the first quarantine: 14 agreements. Some refer to the project agreements as reservations. Vilnius reservations do not receive special attention because they are too dynamic, but in the port city a couple of months ago, the project already reserved more than fifty apartments, so the situation may not be as viscous as it seems at first glance. . No new projects were registered in the port city, except for the block of cabins included in the observations.