The winds of change in Lithuania’s rental housing market: not everyone can afford such a life

New housing rental concept

Though coexistence The rental concept is popular in Scandinavia, the UK, and other Western countries, and this service has recently appeared in Lithuania. According to Mindaugas Statulevičius, president of the Lithuanian Real Estate Development Association, the developers coexistence The materialization of the concept of housing in our country did not begin immediately, until progress was made in several stages.

“You have to talk about it as a segment that has several components. First of all, there is accommodation for students, <...> where there is little space but everything the student needs, <...> then – coexistence housing concept; It is natural to move to this stage, when it comes to renting not only students but also the general public, young professionals who have temporarily come to work in large cities and, of course, families, because student housing is not suitable for families , and simply apartments for rent managed by companies not necessarily in a single object “, – explains M. Statulevičius.

According to the interlocutor, both developers and other companies that employ foreign workers coexistence the service is becoming more attractive.

“Those models are various and they are becoming more popular in Lithuania, it has become interesting for companies to operate in this segment. Why? Because it has become an untapped niche, occupied by owners who operate in the shadows. coexistence M. Statulevičius talks about housing development.

According to the real estate expert, there are now particularly good opportunities to popularize and expand this concept of housing leasing in Lithuania, since in recent years there has been an increase in foreign-owned companies in our country that do not want to buy housing for their employees. .

Also, many people come to Vilnius to work temporarily, for a year or several, and they need a flexible housing rental solution. And the owners usually trust the apartments for at least a year, if we talk about long-term rental, that is coexistence in such cases, a decision “, explains M. Statulevičius.

For real estate development companies, this leasing concept is also attractive because it can diversify their activities and income. According to M. Statulevičius, similar activities helped some developers survive the great economic crisis of 2007-2009.

“Some promoters only want to distribute their activities if there is a decrease, the need for housing disappears, there are lots of plots, and the promoter sees that it will build an apartment building in two years, and it is not clear which market will look like this. Thus, some companies agree to build a long-term relationship with their clients, offer them the rental ”, assures the interlocutor.

Benefits come at a cost

This rental concept has certain benefits for residents. According to the president of the Lithuanian Real Estate Development Association, coexistence service providers operate transparently, that is, they pay taxes. This means that the tenant knows what constitutes their rent, has a contract with the resident and feels more secure, can live with children, pets, etc. Additional services such as cleaning, laundry, etc. are also provided. M. Statulevičius mentions the creation of communities and acquaintances as the advantage of this concept.

“People get together simply living together, spending time together, going to the gym, there are shared basic kitchens, game tables, hallways or other common rooms, where people of the same and different professions and interests meet, and sometimes companies are born This is an additional benefit that common owners cannot offer ”, says the interlocutor.

However, all of the listed benefits are costly to residents. According to M. Statulevičius, homes rented by developers or other real estate companies are often more expensive than those rented by private apartment owners.

For private owners – competition

Coexistence According to M. Statulevičius, renting creates a lot of competition for owners of private apartments, especially those who are engaged in this activity illegally: they do not pay taxes, do not sign leases with tenants. By the way, coexistence it can be an outlet for residents who have children, pets, and therefore cannot find housing to rent. On the other hand, according to M. Statulevičius, this concept of rental housing is unlikely to become a mass phenomenon in Lithuania.

When it comes to a service of this type, there is a certain amount of evidence that the market can “eat” these types of homes. It is estimated that there may be around 1000 student accommodation rooms in Kaunas, because otherwise that rental model would not work, there are only a limited number of foreign students. There are 2-3 times more student housing in Vilnius. Coexistence it also has a certain sample of how much those people tend to rent. This is also determined by the housing market, the extent to which housing is affordable and affordability is only improving, wages are increasing more than housing prices, so it is likely that coexistence there will be no alternative for these people for a long time ”, considers the real estate expert.

The area is small, the price is high, but the advantages are appreciated.

Coexistence Rent can be popular and more justified in metropolitan areas or in cities with the highest number of students who can afford more housing, employees of multinational companies, as well as well-developed transportation infrastructure such as airports, railways, etc. In Lithuania, Kaunas, Klaipėda and of course Vilnius meet these requirements. in vilnius coexistence Vita Žutautaitė, manager of the Liv-in rental project, says that this project attracts young and active people from Lithuania and various countries around the world: people who have come to Vilnius for work or are doing internships, business representatives who have studied since other cities or countries Young people arrived who did not want to live in dormitories or have long-term leases.

“This rental format is very popular among people who travel a lot, save time, do not want long-term commitments or are not prepared to buy a property in a city,” says the interviewee.

Delfi Būstas asked the project manager what are the advantages of this type of home rental. According to the interlocutor, the tenants who enjoy coexistence services, they value the extra space more.

“The residents have common spaces for work, leisure, new acquaintances: a gym, a cinema, a games room, work areas, a laundry room and outdoor terraces. When the virus situation calms down, we will organize various events. Also, the building is located Fast store type, convenient access to the city. We noticed that the tenants are happy that the complex is pet-friendly, so it is possible to stay with them for an additional fee, ”says V. Žutautaitė.

According to the interlocutor, the Liv-in complex consists of 5 buildings connected by horizontal communications and elevators, and also has an underground parking lot, warehouses and bicycle storage. Residents can choose from 6 different types of apartments, ranging in size from 20 to 39 square meters. meters. Apartment rental prices start at 350 euros per month and can reach up to 600 euros per month.

“In total, the complex has up to 240 apartments of different sizes for one or two people. The complex was fully opened in January this year and employment reached about 30 percent. Customers choose different lease terms as needed , and more than half of our tenants extend the contract for a longer period. It depends on personal reasons: foreigners often come to Lithuania to work or study for a limited time. Lithuanians are also emigrating, some residents finally form families and they move to more spacious homes, ”says the project manager.

While it would seem that this type of rental can be an opportunity to build long-term relationships with neighbors, it also has drawbacks such as noise issues, clutter in common areas, etc. According to V. Žutautaitė, this is decided by the lease.

“Before signing leases, tenants are familiar with our internal rules, which establish penalties to discipline residents who misbehave. We also have a contract with a security company, it helps to maintain order in the complex, for this, cameras are installed in common areas. So far, great challenges have been avoided, ”says the project manager.

Delfi Būstas asked about the cost of renting a Liv-in project. The website shows that 21 square meters M. The rental price of the apartment m (without additional taxes) is 350 Eur, 24 m2. m from the apartment – from 420 Eur, 36 square meters. m – 500 Eur. It should also be appreciated that each apartment is furnished differently, some of them have more furniture, spaces or the like.