In 2023, the annual growth of apartment prices was 1.7%, with an average annual increase of 8.2%

The Ober-Haus Housing Price Index (OHBI) in Lithuania, which tracks changes in apartment prices in the five largest Lithuanian cities (Vilnius, Kaunas, Klaipėda, Šiauliai, and Panevėžys), recorded a 0.5% increase in December 2023. The overall level of apartment prices in Lithuanian cities increased by 1.7% over the past 12 months. The average annual growth in apartment prices in 2023 (January to December, compared to the same period in 2022) was 8.2%.

In December 2023, apartment sales prices in Vilnius, Kaunas, Klaipėda, and Panevėžys increased by 0.4%, 0.6%, 0.8%, and 0.8%, respectively. The average square meter price was 2,575 Eur (+11 Eur/m²), 1,736 Eur (+10 Eur/m²), 1,640 Eur (+13 Eur/m²), and 1,081 Eur (+8 Eur/m²). Meanwhile, Šiauliai experienced a 0.7% decrease in apartment prices in December, with an average square meter price of 1,098 Eur (-8 Eur/m²).

Over the year (December 2023 compared to December 2022), apartment prices increased in all major cities: Vilnius – 1.1%, Kaunas – 2.7%, Klaipėda – 2.4%, Šiauliai – 2.4%, and Panevėžys – 2.0%.

“Despite a two-year consecutive decline in the number of real estate transactions in the Lithuanian housing market, a decrease in housing prices was avoided in 2023. Throughout the year, we observed only minor positive or negative monthly changes in apartment sales prices, resulting in a symbolic annual price increase (1.7%). The last time a lower annual price increase was recorded in the country’s major cities was ten years ago in December 2013 when the annual price growth was 1.1%. As apartment sales prices remained at record highs throughout the year, the average annual change in 2023 remained quite solid at 8.2%. Comparing the results of the last decade, faster average annual growth in apartment prices in the country’s major cities was only recorded in 2021 (14.2%) and 2022 (21.5%). Overall, in 2023, the trajectory of apartment sales prices coincided with the country’s inflation indicators, essentially reflecting changes similar to other consumer goods and services.”

“Looking at individual cities or housing segments, the general trends in price changes throughout the year were almost identical. A rapid slowdown in price growth was observed in all major cities and all housing segments without exception. Despite a consistently low level of activity in the primary housing market and developers offering discounts and various incentives, new construction apartments in 2023 increased slightly more than older ones. New construction apartments in the country’s major cities increased on average by 3.2%, while older ones increased by 0.7%.”

“Even with subdued sentiment and noticeably decreased activity in the real estate market, the majority of sellers did not significantly reduce the prices of their properties. Throughout the year, we observed participants in the housing market living with a sense of waiting. Potential buyers awaited a clearer geopolitical situation, lower mortgage interest rates, or lower housing prices, while sellers anticipated the return of buyers to the market and patiently awaited them. Meanwhile, property developers actively promoted their properties, offering various benefits to buyers and reducing the scope of new project developments. If the anticipated breakthrough by buyers into the market occurs in 2024, it is likely that we will also avoid a negative annual change in housing prices. However, considering all existing global or local challenges, there is a possibility that the recovery of the housing market may not be as rapid, and the desires and opportunities of buyers to acquire housing will linger longer than many expect,” says Raimondas Reginis, Head of Market Research for the Baltic States at Ober-Haus.