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Artūras Valaitis, owner of the Memelhaus real estate, says that processes have already started in the port city and its surroundings when people buy houses and apartments that have not yet been built, and the builders do not even know at what price to sell. because building materials get more expensive almost every day.
“Expanded polystyrene panels have gone up in price by 50 percent per month, all other building materials have gone up in price by 10 to 20 percent recently,” says A. Valaitis. According to him, and with the rising prices of materials it is already difficult to obtain, the desired building blocks or other materials have to wait 2-3 weeks.
Raise the prices
“There are already cases in which only the reservations of real estate objects are suspended and project developers are already trying to negotiate with clients who have signed preliminary contracts at a lower price, because they see that the profitability of the projects is falling significantly”, says A. Valaitis.
“Building materials are becoming more expensive, metal prices have risen by 30 percent, the world is recovering from a pandemic, the amount of money on the market is huge,” says A. Bružas.
According to him, the fact that Lithuania has a record amount of € 19 billion in deposits in private bank accounts is just the tip of the iceberg. Everyone knows the Lithuanians’ attachment to cash, and keeping money in banks at the moment is not even profitable. Once again, real estate is becoming very popular as a means of simply keeping money from depreciating.
“Prices have been going up for almost a year, the market stopped only a couple of months last spring,” says A. Bružas. He estimates that over the years, the price of old construction homes increased by 10-15 percent, and new construction by 15 percent or more, depending on the location and the object.
However, A. Valaitis points out that this year alone they have risen 10 to 15 percent of prices in Klaipeda. Growth trends are particularly noticeable in May.
“At first, apartment prices went up and then house prices went up,” says A. Valaitis. According to him, the situation is also being taken advantage of by builders, who are already raising the prices of their services, but still have work to do.
Wait three months
“If you have now decided to start building a house, the builders will probably tell you that the work can only start in 2-3 months, because there are a lot of orders today,” says A. Valaitis.
According to him, the real estate market is stimulated not only by the investment of Lithuanian emigrants in real estate in the homeland, which became more active during the pandemic, but also by a relatively new phenomenon.
“These processes are taking place like the early emigration of Lithuanians to Europe. At first, a man leaves, works for several years and then brings a family that needs housing, ”says A. Valaitis.
According to him, although such trends are more noticeable in the capital, there are also cases in western Lithuania.
According to A. Bružas, Klaipėda is already becoming an attractive place for Lithuanians to buy a second house by the sea, because here the prices are lower not only compared to Neringa, but also in Palanga, and next door is Smiltynė , excellent Beaches
© DELFI / Rita Gečiūnaitė
Lack of help
According to A. Bružas, property prices in Klaipėda also rise due to lack of supply.
“Currently some new projects are being developed, practically exhausted, we see new plans, but they will be offered to the market in about half a year or even later,” says A. Bružas. He predicts that prices will continue to rise steadily by 10-15 percent over the next several years.
“An infrastructure charge has been introduced. New taxes are foreseen for real estate developers on land leased to the state, which will reach around 50 percent of the market value of the land, all this will affect the final prices ”, says A. Bružas. According to him, the jump in building materials prices is likely temporary as it is related to the spring construction boom.
The price increase is temporary
A representative of a Lithuanian foam production company interviewed by Vakarų ekspreso confirmed that production has actually increased in price by 50 percent. This was due to the fact that for three months in a row, raw materials became more expensive, and the price per ton increased by up to 1,000 euros. Commodity prices were expected to start falling earlier this month, but have risen a bit more. However, even with the drastic rise in the price of foam, producers are barely able to keep up with demand.
Still, this price bubble is expected to collapse quickly. There is no reason for a target price increase of this magnitude, as the main feedstock for foam production, oil, has become more expensive on world markets, but not significantly.
Buy plots
“The real estate market was significantly affected by the pandemic. Already a year ago, the demand for houses, land and orchards grew remarkably, people felt that the quarantine restrictions could be prolonged”, A. Bružas sees the desire of the people escaping from crowded apartment buildings.According to him, it was this year that people who bought land last year began construction.
However, A. Valaitis says that everything is being bought at the moment: both apartments and houses. “Buyers of rental homes and as an investment to protect money are more focused on modern, new-build homes,” says A. Valaitis.
Ecology impacts
According to A. Valaitis, director of Memelhaus, the issue of ecology became especially relevant last year. The Grigeo Klaipėda pollution scandal and the ever-escalating odor problem in the southern part of the city, for some time this reflected on the behavior of property buyers and influenced their decisions.
“However, it doesn’t really suck every day, maybe the ecological situation has improved, but today I don’t think it will affect the decision of the buyers,” says A. Valaitis.
According to him, this is also illustrated by the fact that the prices of individual houses and newly built plots in the southern part of the city (near the BIG 2 shopping center) are quite high and equal to house prices in other parts of the city. .
“Much is determined by the location, the communication, the nearby infrastructure”, – A. Valaitis mentions the main criteria when choosing a home.
According to him, old-build houses are traditionally cheaper in South Klaipeda’s dormitories. However, even in this part of the city, property prices rose proportionally, although there were no objective reasons for this, such as the rise in the prices of construction materials or labor, which have a direct impact on the price of new real estate. Projects.
Stable rental
According to A. Bružas, the property rental market in the port city has avoided major crises and downtime and is relatively stable. The decrease in the flow of foreign tourists caused by the pandemic is offset by the increase in the internal flow of vacationers who choose Klaipeda as an alternative to spas for short trips by the sea.
The rental market is also significantly affected by the flow of immigrants from neighboring countries to the East who work in the port, transport and construction sectors. More and more real estate objects are appearing on the market, which are adapted for the accommodation of employees on short-term leases.
Price scissors
According to the Ober-Haus real estate agency, the average price per square meter in an old apartment building in the southern part of Klaipeda starts from 720 euros, and in the northern part of the city, in a new building, it reaches 2,200 euros and more depending on trim level.
According to the Agency, the growth of prices in Klaipeda in January-April this year in the port city was about 5 percent. Cheaper homes became more expensive. In terms of prices, Klaipeda is not far behind Kaunas. Compared to Vilnius, property prices in the port city are 20 to 100 percent lower in separate segments. In terms of property prices, Klaipeda is also behind the country’s main tourist centers, Neringa, Palanga and Druskininkai.
The bureaucracy stops too
According to A. Bružas, the Klaipėda property market is also affected by the fact that companies do not receive the general plan of the new city, which has already been in preparation for six years. As a result, landowners cannot start developing new projects. The municipality is also criticized for the fact that the city itself, unlike other large cities in the country, has a large amount of arable land that belongs to the municipality itself.
“We lack the initiative of the government, the mayor to solve these problems,” says A. Bružas. He also warns of another threat to the real estate market.
“The new order leaves a lot of freedom for the interpretations of the officials. It may be that when starting to develop a new project, the officials may request the preparation of a new detailed plan of the territory at their own discretion, without further argument”, A. Bružas sees future threats.
According to him, this means that in this case the implementation of a new project would be postponed by at least 1 to 1.5 years, as this is usually the planning procedure. And that certainly won’t have a positive effect on a market that is currently short on supply.
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