For the 14th time, the real estate leaders’ conference “CORE”, organised by the Lithuanian Real Estate Development Association (LNTPA), focused primarily on addressing the issue of housing accessibility and affordability. The business community agrees that housing is increasingly becoming a luxury good and notes a lack of concrete government actions aimed at increasing supply, which would also help ease pressure on rising housing prices. The 15th “CORE” conference will take place on February 4, 2027.
At the conference, LNTPA President Mindaugas Statulevičius also presented the annual Real Estate Developers’ Expectations Index. Calculated on a scale from 0 to 100, the index value, as in the previous year, stands at 72 points. What distinguishes this year most is that developers are planning projects across all regions of Lithuania.
“This year, the market is characterised by cautious optimism. We are particularly pleased that, for the first time, the geography of planned real estate projects is so widely spread across the country. Alongside more active industrial development in the regions, there is a growing need for other infrastructure – housing, retail and service facilities,” says M. Statulevičius.
Impressive Prospects for the Housing Market
“If you are a real estate broker, investor or developer and failed to make a profit last year, you definitely did something wrong,” said Raimondas Reginis, Head of Market Research for the Baltics at Ober-Haus, opening his presentation at the conference.
According to him, housing market growth last year reached around 20%, second only to 2021. In 2025, a total of EUR 4.5 billion was spent on housing purchases.
R. Reginis notes that this year Lithuania’s housing market is expected to move even further ahead compared to Latvia or Estonia. While those countries are still working to restore investor and buyer confidence, Lithuania’s main challenge is how to offer more new housing supply.
According to Ober-Haus data, the number of apartments completed in Vilnius this year is expected to be 60% higher than in 2025, reaching 4,500 units. After a slower period, development is also returning to Kaunas, where 1,000 apartments are planned for next year, while Klaipėda is expected to see record levels not witnessed in 15 years.
Nevertheless, despite strong short-term prospects, experts urge market participants to consider the longer-term outlook.
“The question is what our economy will look like in 2027–2028, as global challenges remain significant. After a very strong 2026, the market may later lose momentum – after very good years, it is hard to expect even better ones. Buyers’ purchasing power will also need to be assessed, as incentives for housing price growth will not disappear,” R. Reginis notes.
What Should Be Encouraged: Affordability or Accessibility?
Žygimantas Mauricas, Chief Economist at Luminor Bank, says that residents who purchased housing 10–15 years ago may feel financially more secure today, while current affordability issues are mainly concentrated in specific regions or parts of Vilnius.
“If a professional in a certain field can typically afford housing in Klaipėda or Kaunas, it is often much harder to do so in Vilnius. We need a broad discussion on what kind of housing policy directions we want. One possible solution could be differentiated legal regulation in smaller cities, where purchasing power differs,” the economist suggests.
Povilas Poderskis, Chancellor of the Ministry of Environment, believes that housing accessibility in the regions could be promoted through public–private partnership projects, for example by developing municipal housing.
“Finland’s municipal housing model shows that a city can actively participate in the housing market and ensure affordable rental options for residents. Lithuania also has room for such an approach, especially in regions where economic projects are emerging and housing demand is growing. Businesses alone would be reluctant to invest in apartment buildings in places like Plungė, as costs are the same while purchasing power is uncertain,” he says.
Saulius Putrimas, CEO of Merko Statyba, argues that although Lithuania’s housing policy is currently consistent, its goals are not linked either to increasing supply or improving affordability.
“I have not heard a single politician set a goal of having 10,000 new apartments on the market within 2–3 years. The level of regulation and requirements has become so high that housing is genuinely turning into a luxury product,” he states.
Marius Skuodis, Member of the Board of the Bank of Lithuania, notes that Lithuanians’ desire to own their homes is similar to that in other countries in the region, meaning home ownership remains important despite market fluctuations.
“Over the past two decades, inflation-adjusted housing prices in Lithuania have risen by about 60%, while the EU average was around 20%. Over the same period, purchasing power also increased by roughly 60%. As a result, overall affordability has remained similar, although significant regional disparities are evident,” says M. Skuodis.
Demographic Challenges
The conference also addressed what a shrinking and ageing population means for the real estate market, especially in the context of Lithuania’s record-low birth rate.
Boguslavas Gruževskis, Director of the Lithuanian Centre for Social Sciences, says that the main homebuyers today are aged 25–40, meaning that demand may naturally decline in the future as this age group shrinks. However, other factors are expected to support demand, so major problems are unlikely.
“Real estate developers will certainly not run out of work – there is no need to ‘turn off the lights and leave’. Demand will be supported by steady re-emigration, as residents return, as well as immigration, such as arriving military personnel. In addition, there is a strong need to upgrade existing housing. Older residents increasingly seek better living conditions, so the overall market outlook remains fairly optimistic,” he says.
Indrė Genytė-Pikčienė, Chief Economist at Artea Bank, explains that today’s demographic structure is strongly influenced by past fluctuations in birth rates and waves of emigration, resulting in uneven population distribution.
“Low birth rates are partly linked to the fact that many young families lived abroad and did not raise children in Lithuania. However, some of these losses are offset by returning emigrants – for several years now, their number has exceeded those leaving, which is a very positive trend,” she notes.
What Lies Ahead for Commercial Real Estate Developers?
Regimantas Kacevičius, Partner at Colliers International Advisors, shared insights into the situation across different commercial real estate segments.
According to him, the stock office segment currently faces the biggest challenges due to very active development over recent years. Meanwhile, the market for large shopping centres is already saturated, while smaller projects are highly dependent on location, which is constrained by limited land availability.
“The office market is quite hot, with strong competition for tenants. But tenants are coming. In Vilnius, one-third of companies consider changing offices each year, and one-fifth actually do so. This supports steady market activity,” says R. Kacevičius.
In the industrial real estate segment, Laurynas Kuzavas, Head of Sirin Development, observes a gap between buyers’ and sellers’ price expectations, limiting the number of large transactions.
“The logistics sector is directly linked to consumption and geopolitical decisions. Businesses are waiting for clarity on political and trade directions. This will determine further industrial and logistics development. The key question is what the situation will look like in a decade, as industrial real estate must learn to operate under constant uncertainty,” he adds.
Martynas Trimonis, Head of Real Estate Clients at Swedbank, says banks’ overall approach to real estate financing remains positive – non-performing loans remain minimal, and the financing portfolio is growing much faster than the EU average.
Asked whether now is a good time to build offices, he said he does not believe so, but sees the greatest potential in the retail segment.
Birutė Kalanovaitė, CEO of Panorama LT, acknowledges that while domestic consumption continues to grow and retail is performing strongly, constant adaptation to changing conditions is essential.
“The ability to respond to change in time becomes a key competitive advantage. Consumption is currently strong, but the market remains sensitive to potential economic fluctuations. If the economy were to slow, the impact would be felt quickly in the retail sector,” she says.
Opportunities in Poland
For several years now, the largest Lithuanian real estate players have been actively assessing development opportunities in Poland, with some already having completed initial projects or transactions and gained solid market experience.
Martynas Žibūda, Head of Eika Development, reveals that the Eika Group has decided to expand into Poland, starting with the residential segment. The company has been analysing the market for nearly a year and is seeking a partner to entrust with investments.
“Expansion abroad is both a diversification and risk distribution strategy for us. Partners are offering returns of 15–20%, which currently looks more attractive than in Lithuania. Frankly, we face a dilemma – whether to expand into Kaunas and Klaipėda or into Poland. We feel this is a good moment to enter the Polish housing market, as it has declined somewhat from its peak,” says M. Žibūda.
He adds that Poland offers excellent opportunities for further expansion.
“Poland is not a single-city market. For now, we are focusing on Warsaw, but we have selected a partner with a land bank in several major cities, so I believe that in the near future we will be active not only in Warsaw but also elsewhere,” he adds.
However, Gustas Germanavičius, Director of the crowdfunding platform Inrento, emphasises that real estate project financing in Poland is very expensive.
“For alternative lenders, this is a favourable market. While in Lithuania smaller banks can offer developers loans at around 6%, in Poland similar loans from smaller banks start at 10%. This means we automatically compete with local banks,” he notes.
Bank financing processes in Poland can also take 3–6 months, which is too long for faster-moving real estate projects. As a result, developers increasingly turn to alternative lenders.
Government Promises Faster Decisions
Aušra Mudėnaitė, Partner at law firm Sorainen, identified two key issues in Lithuania’s construction regulation that slow down project development. One of them is overly strict national-level regulation.
“When analysing larger areas, both developers and municipalities see that following the path set out in the Law on Territorial Planning leads to a dead end – the process cannot be completed. As a result, interim solutions emerge that work fragmentarily and episodically, but in the long term are unlikely to be effective.
The second issue lies in political decision-making. Fear of the perception that a decision might favour business often overrides common sense. As a result, necessary decisions are not made simply because of how they might appear,” the lawyer explains.
Asta Rokickienė, Head of the Architecture and Construction Policy Group at the Ministry of Environment, revealed that upcoming changes will focus on greater automation of approval processes. For example, in territorial planning, all decisions and approvals are expected to be handled through the TPDRIS system, eliminating informal or non-transparent approvals.
“In the construction permit issuance process, we have already designed algorithms that would allow the system itself to automatically verify key parameters – building height, development intensity and density. We are also modelling a solution whereby the three-day check would be automated, and by uploading a 3D model of the building, the system could assess distances to plot boundaries and determine which approvals are required,” explains A. Rokickienė.
She adds that these innovations could be presented as early as during the spring session of the Seimas.
Translated by AI and reviewed for accuracy
Photo credit – Irmantas Gelūnas
