The real estate market shows its muscles: a city stands out and it is not Vilnius

“Sales in the primary housing market of the country’s main cities continued to grow in August, allowing real estate developers to breathe much easier. The growing market activity, despite the growing number of cases, has reaffirmed that the The current situation is not analogous to that of 2008-2009. On the other hand, the pandemic has not yet been defeated: an average of 27 new cases per day was registered in August.You need to be vaccinated and learn to live in the conditions changed by then. Real estate market trends are encouraging and it is to be expected that public mobilization, government control measures and fiscal stimulus will not only support but also increase market activity. It is important to note that the market situation is not formed by individual factors, but by their synergy ”, says Tomas Sovijus Kvainickas, Head of Investment and Analysis of Inreal Group, in a press release .

According to Inreal, 388 new apartments were agreed in Vilnius (412 sold, 24 abandoned). This result is ahead of August 2017 (343 total sales), slightly behind 2018 (401) and August 2019 (458).

On the other hand, according to T. Kvainickas, the current situation is somewhat different and sales growth is stimulated not only by positive expectations for the future, but also by the reserve formed during the quarantine period. The change in situation is also confirmed by the number of agreements terminated. In 2019, up to 10 preliminary apartment purchase and sale agreements were canceled each month.

“During the pandemic and quarantine, this figure jumped to 45 (in May). 24 transactions interrupted in August is the lowest number since April, but still significantly higher than a year ago, “says the real estate analyst.

In August, buyers were offered only a new stage of residential housing, but the public communication of real estate developers is gaining more and more positivity, so buyers who do not find a suitable home among the 4553 objects offered in the market should soon receive an even broader option. The positive situation in the market is partially illustrated by the change in the liquidity index, which went from 1.03 to 1.08 in July, but this change is also related to the drop in new supply.

According to T. Kvainickas, optimistic results are also recorded in Kaunas. During the quarantine period, the apartment market in the temporary capital, which was particularly affected, woke up from lethargy at the latest, but suddenly. Due to the recently proposed low-cost items, the recovery in August was particularly pronounced: 94 preliminary transactions (97 sold, 3 abandoned).

These figures are better not only for August 2018 (51) but also for the corresponding period in 2019 (72). On the other hand, real estate is unique property and not only the aggregate results are important, but also the individual components. Excluding around 30 extremely cheap items, the monthly results are still good, but they are no longer surprising, “says T. Kvainickas.

He goes on to say that in August, the Kaunas main housing market warehouse grew by 75 new objects in two projects. In one of them, more than 300 homes will be offered over the next few years, taking into account the development of the project. The liquidity ratio in Kaunas did not vary much, reaching 1.36 at the end of August. The improvement in the indicator, given that new products are being launched on the market, is a particularly positive sign that the city is gradually being propelled by the spring-summer disasters of 2020.

According to T. Kvainickas, although the results in Klaipeda did not show as big a jump as in Kaunas, they are also positive. In August, 32 homes were agreed in the port city (41 sold, 9 canceled). Total sales are ahead of the analogous months of 2017-2019, when 17, 25 and 25 properties were agreed, respectively. There was no new supply in Klaipeda in August, so the liquidity ratio improved from 1.42 to 1.30. The increase in the number of canceled transactions is not a good sign, but the volume of activity itself shows that buyers are becoming more active in the market.

August is also important for the primary housing market, according to the real estate analyst, due to increased activity in the rental segment. During the quarantine period, homeowners faced housing problems due to the closure of state lines, distance learning, limited business activities, and social contact. With the start of the new school year and a slight decline, the travel insurance market needs to stabilize again. August and September will re-evaluate the attractiveness of rental housing, which accounted for a significant portion of primary market housing transactions before the pandemic.