„The monthly increase can be seen both as monthly fluctuations and as a jump in investment property acquisitions before the new responsible lending regulations (RLR) come into force. From August, investment property acquisitions may decrease slightly, while the practical impact of RLR changes will show whether first-time home buyers will be able and willing to take advantage of the lower down payment option,” says Tomas Sovijus Kvainickas, Head of Investment and Analysis at “Inreal”. According to him, the changes were announced a year ago, during which time housing prices in the largest segments increased by about 10-15% (and slightly more in smaller asset groups more dependent on structural changes). Assuming that the buyer was waiting for the possibility of a lower down payment, the initial down payment today could be about 23-27% lower, while the loan amount would increase by 16-22%, i.e., if a year ago a home would have cost 100 thousand Eur, today its price would reach 110-115 thousand Eur, the initial down payment would decrease from 15 to 10-11.5 thousand Eur, and the required loan amount would increase from 85 to 99-103.5 thousand Eur.
In July, 780 new homes were included in the monitoring of Vilnius’ new housing market supply, about one and a half times more than in June (469) or last July (534). The number of homes available in the supply increased to 6911, of which 1268 are already reserved, and among the 5643 free homes, almost half are economy class, and slightly more than a third are mid-range homes. The further increase in supply cooled the market down a bit more; the market balance indicator value increased from 1.14 to 1.18 (the market is considered more favorable to the buyer when the indicator value exceeds 1.25). “The long-standing shortage of supply encouraged developers to bring new projects to the market as quickly as possible, but if the RLR changes encourage first-time home buyers, the question arises as to how much more new supply could be generated and whether its further growth in the future would also occur on the outskirts of the city,” says T.S. Kvainickas.
In July, 274 cases of price increases and 264 cases of price reductions were recorded in the primary housing market of Vilnius. Taking into account structural changes in supply, in the middle of the year, economy class housing cost 3412 Eur/sq. m (no change), mid-range class – 4753 Eur/sq. m (+2%), prestigious class – 7628 Eur/sq. m (no change), lofts – 3634 Eur/sq. m (-6%), cottages – 2383 Eur/sq. m (-1%). The annual price growth in the economy segment reached about 9%, and in the mid-range segment – about 16%.
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In the primary housing market of Kaunas, 81 home sales were agreed upon in July (93 new agreements and 12 returns) – this is 17% less than the previous month (98, 107, 9), but a quarter more than in the same period last year (65, 65, 0). No new supply was recorded, so the number of homes available in the supply decreased to 2035 units. Of these, only 1270 homes are free, and the rest are reserved. The number of price increase cases rose to 110, while sellers were not inclined to reduce prices – only 20 price reduction cases were recorded. The market balance indicator value increased to 1.54, but, considering the large proportion of reserved housing, Kaunas city’s primary housing market is considered balanced.
In the primary housing market of Klaipėda, 28 total sales were registered in July (30 new agreements, 2 returns) – almost half less than in June (59, 62, 3) and slightly less than in the same period last year (30, 40, 10). With no new supply recorded, the number of homes available in the supply decreased to 1067, of which 640 are free. Only 1 price change case was recorded – the price of the home was reduced. The market balance indicator in the port city shows a buyer’s market (2.49). Due to the large proportion of reserved housing, this indicator is slightly higher, but it still indicates a more favorable environment for buyers.
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