The rapid growth in high class homes construction and sales that has been recorded in the recent years reached its peak last year, where an entire 634 such homes were purchased by new owners, comprising a 12% market share.
For the second year in a row, the most high class newly constructed flats in Vilnius (195 or 45.5% more than the previous year) were sold by one of Lithuania’s largest home, business and leisure space developers Darnu Group, which took a 30% share of this market segment (in 2018, this metric reached 28%).
The company realised 186 flats in the capital’s revived Old Town quarter Paupys, another 9 in the Užupio Krantinės quarter across the Vilnelė. Last year, the company invested 40 million euro in Paupys – three residential building blocks are nearing completion there and constructions have been launched for two more.
Darnu Group sales director Mantas Umbrasas states that buyers of high class homes chose them last year because of offerings that matched their requirements and the flexible adaptation of properties to specific needs.
“Last year in Vilnius there was rapid formation of demand for higher quality and extra added value real estate. Home affordability levels continuing to grow by two digit figures and positive consumer expectations formed a trend to choose perhaps lower space, more rationally planned, but better placed and surrounded by maximally developed modern city infrastructure quality real estate, also minding high quality maintenance,” M. Umbrasas notes.
Bought more than built
According to Darnu Group data, in 2019, 40.54% more new construction flats were sold in Vilnius as compared to 2018. The year before, sales growth in the capital were far more modest and only exceeded the results of 2017 by 3.8%.
“Over a year, more flats were purchased on the market than developers managed to offer. In 2019, developers presented more than 5,000 new flats to the market, thus the number of unsold homes on the market declined to 4900 flats by the end of the year. According to our data, the average price of a sold new flat in Vilnius reached 1,990 euro per square meter at the end of December last year,” M. Umbrasas said.
According to him, with the growth of the entire country’s economy, consumer confidence was the largest last year since 2008 and the demand for real estate was further augmented by the recording of minor positive net migration, as well as around 15% growth in specialist wages.
“The pressure of demand was perhaps felt most acutely in 2017, however last year the market finally began to realise this demand due to the increased supply. Within this uplift, the revival of non-functional territories in central Vilnius became more active, as well as the capital’s residents investing in higher quality of life. Vilnius residents want to live and work closer to the city centre because it has the best developed infrastructure, fastest access to various services and this pursuit is reflected in sales numbers,” M. Umbrasas summarises.
Could interest foreign investors
According to the specialist, the market situation allows the prediction that buyers of new homes will next year increasingly seek exceptional, quality projects, added value. Furthermore, rising wages, favourable financing conditions and demographic growth in Vilnius, as well as high profitability of rent currently create favourable conditions to purchase property for investment.
According to M. Umbrasas, if these conditions remain stable throughout this year, our market may more actively attract not only local, but also foreign investors.