Housing problems – more than one
Lithuania stands out with one of the highest home ownership rates – about 90 percent of residents own their homes. Lithuanians are not inclined to rent for life, as is common in some other countries.
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Vice-Minister of Environment A.Rokickienė noted that the housing affordability situation in Lithuania is not encouraging. An assessment of opportunities to increase housing affordability in Lithuania, commissioned by the Ministry of Environment, showed that problems vary depending on the municipality.
However, today not only young families but also single individuals and larger families, for example, four-person families, face difficulties in acquiring homes. Some residents find themselves in a situation where their income is too high to qualify for social housing, but too low to accumulate a sufficient down payment to purchase a home. Such residents are forced to move from the city center to more remote areas where housing is cheaper, but important infrastructure is lacking.
In major cities, investors take a large share of the market. For example, recently in Vilnius, about 40 percent of housing transactions were investment-related (investment transactions are considered those where the value of a residential real estate object purchased by a household is less than at least one object already owned, as well as corporate housing acquisitions). The attractiveness of housing acquisition for investment purposes and its impact on the market should be systematically evaluated, and the most beneficial measures for housing affordability should be identified.
In the regions, says the Vice-Minister of Environment, there is another problem – there are many homes that do not meet quality requirements, and residents’ incomes are lower than in big cities: “There are about 20,578 apartment buildings and 213,630 single and two-family residential houses that were built between 1960 and 1990 and are in poor condition,” she says.
Incomes catch up with housing prices, but not immediately
During the discussion, N.Valinskytė noted that housing affordability is indicated by the ratio of housing prices to residents’ incomes. According to her, the housing market is currently very active, and housing prices are growing at double-digit rates. Price growth is currently averaging about 15 percent, while salaries grew by about 8 percent per year.
Nevertheless, when evaluating the long-term perspective, says the expert, housing prices in Lithuania are not too far removed from incomes. The affordability indicator is characterized by fluctuations: as housing prices rise faster than residents’ incomes, the gap between housing prices and people’s financial capabilities widens. As a result, residents’ housing purchases decrease, other market-balancing factors come into play (for example, increased interest rates, higher supply), the market begins to cool, and the growth of residents’ incomes eventually catches up with the growth of housing prices.
Long-term rental could become more attractive
According to A.Rokickienė, long-term rental could be one of the alternatives to owning a home, but it is not that popular in Lithuania – only about 1.04 percent of long-term rental agreements are registered.
“There is no such culture in Lithuania where people would prefer to rent rather than buy their own home,” says the Vice-Minister of Environment, but adds that the lack of stability and security in the rental market also plays a role, which could be regulated.
For example, tax incentives could be provided for landlords who officially register rental agreements and declare income received from rent. It would also be possible to expand the functions of the State Consumer Rights Protection Authority so that tenants and landlords could apply for problems arising in rental relationships, and not just resolve disputes in court, as judicial processes can be long and complex.
A.Rokickienė also drew attention to the role of municipalities in solving the housing affordability problem. According to her, municipalities could more actively form their housing fund, as they have the necessary means – land, infrastructure, and opportunities to create more favorable conditions for housing development. However, she said, financial incentives are needed for this.
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Construction processes are being optimized
Discussion participants unanimously agreed that construction processes could be faster, but the quality of buildings must not suffer as a result; they must still meet essential requirements, such as fire safety and hygiene standards.
A.Rokickienė reminded that from January 2027, a new construction technical regulation “Buildings” will come into force, which combines 7 previously valid regulations into one, so instead of approximately 700 various provisions, about 200 essential requirements remain.
According to her, in 2024, the information system for construction permits and state supervision of construction, “Infostatyba,” was significantly updated and reorganized. According to 2025–2026 statistics, 95 percent of construction project permits are issued on time. All this indicates that construction processes are becoming increasingly smoother.
Renovation can revive old apartment buildings
The price of new housing consists of several parts: land price, development price (design, development planning documents), construction price, cost of money (bank interest and fees).
“The state should not regulate construction costs and development costs, because a stingy person pays twice. Poor architecture and good architecture, unfortunately, cost the same, and for talented architects, renovation or social housing is not interesting.”
Statistics show that a family with average income can borrow about 260 thousand euros. But if we are talking about a 4-person family and an 80 sq. m apartment – such construction housing is not available in new construction projects in Vilnius, and a home of that size can only be acquired in the secondary market, and if we look at where such housing is located, it is in neighborhoods built during the Soviet era,’ says M.Marozas.
The urban planner believes that the secondary market could also become a source of quality housing, but this would require a comprehensive renovation of old districts: renovating apartment buildings, adapting homes for people with special needs, solving parking issues, and improving public spaces.
According to him, Soviet-era micro-districts have potential – they are abundant in greenery, have developed social infrastructure, and larger distances between apartment buildings have been preserved, which is difficult to find in new construction neighborhoods.
The Ministry of Environment has submitted a draft resolution for inter-institutional coordination on the establishment of an inter-institutional working group, which will analyze the proposals presented in the Housing Affordability in Lithuania Enhancement Opportunities Assessment study and evaluate their implementation possibilities. By the end of this year, it is planned to agree on the main directions and decisions of the agenda, and the draft National Housing Affordability Enhancement Agenda is planned to be prepared in Q1 2027.
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