Lithuanian Residential Real Estate Market Report: Q4 2010 - Price Trends And Analysis.pdf

Price Trends:

- National Average: The Lithuanian apartment price index (OHBI) experienced a 3.0% drop in 2010, marking the third consecutive year of negative growth. However, this decline was relatively modest compared to previous years (-15.2% in 2008 and 26.8% in 2009).
- Regional Disparities: Prices varied significantly across cities:
- Vilnius showed positive price changes starting in June 2010, with a symbolic 0.1% increase for the year.
- Kaunas experienced the largest annual drop (-8.3%).
- Klaipėda and Siauliai saw declines of 4.9% and 3.1%, respectively.
- Panevezys had a slight decrease of 2%.
- Segmental Analysis: Price trends within cities differed based on property type and location:
- New apartments in residential districts experienced a 5% increase in Vilnius.
- Old apartments in these areas saw a slight rise (3–6%).
- More expensive properties (new and old in prestigious areas) dropped by 3–15%.

Transaction Volumes:

- Despite price fluctuations, the number of residential property transactions increased across all major Lithuanian cities in 2010.
- Total transaction volume was over 27% higher than in 2009, driven by lower prices and improved financing conditions.
- However, activity remained below pre-2007 levels (around 4,000 monthly transactions).

New Construction:

- Supply of new apartments was significantly reduced in 2010 due to economic conditions:
- Vilnius completed 500 new apartments, a sharp decrease from previous years.
- Klaipėda and Kaunas also saw substantial drops in construction (350 and 160 apartments, respectively).
- A moderate growth in supply is forecasted for 2011 based on renewed building work and some new projects starting.

Key Takeaways:

- The Lithuanian residential property market continues to recover from the 2008–2009 downturn but at a slower pace than previous years.
- Prices remain volatile, with significant regional variations.
- New construction remains limited due to economic uncertainty and developer prudence.