An overview of the real estate market of Lithuania

Lithuania is located on the coast of the Baltic Sea, in the north it borders with Latvia, in the east - with Belarus and in the south-west - with the Kaliningrad region and Poland. From the moment the Baltic states joined the European Union in 2004 and until the 2008 crisis, foreign investors have been actively interested in the Lithuanian real estate market. Now in Lithuania, the policy of attracting foreign investors is not so actively pursued, and the total volume of foreign investments in the country's real estate sector is about 10%. Real estate is not as popular among Russian buyers as, for example, in neighboring Latvia. And yet it is the Russians who lead in terms of the number of other foreign home buyers in Lithuania . Lithuania is interesting for Russian citizens because when buying real estate, the owner receives an annual Schengen visa with the right to stay for 180 days in the Schengen countries. The visa is renewed every year on the basis of ownership documents - this is a fairly simple and quick procedure. In addition, the process of buying real estate in Lithuania is much faster and easier than in Latvia, the level of infrastructure is the same and real estate prices are lower. Foreigners more often choose real estate in resort areas - on the Curonian Spit, in Palanga, Klaipeda and in the Druskininkai resort. Compared to other European resorts, real estate is relatively inexpensive. Mainly local residents are interested in housing in the capital and large cities, but there is also demand from foreign buyers.

Transport accessibility

The capital of Lithuania, Vilnius, is connected with Moscow by direct flights of Aeroflot and Transaero airlines. In December 2011, IrAero Airlines launched a direct flight from Moscow to Kaunas. Also, since March 25, 2012, Ak Bars Aero has introduced direct flights on the St. Petersburg-Vilnius route twice a week.

Real estate market

The development of the Lithuanian real estate market took place in several stages. From 1992 to 2002, the country's market developed actively in the commercial real estate sector, and mainly during this period the construction of office buildings and shopping centers was carried out here. 2002 to 2005 the growth of the residential real estate sector in Lithuania is noted. Experts believe that the market was overheated during this period - the price jump was sharp, and often the cost of housing turned out to be unreasonably high. The most expensive offers were for apartments in new buildings, as the demand for them was very high. This situation occurred due to the country's active economic growth, improved mortgage lending conditions, as well as speculative real estate transactions. In 2005, the Lithuanian real estate market continued to develop rapidly and until 2007 there was an increase in the price bubble. The average increase in the cost of apartments in large cities of the country for the year was 50%, and in some segments - 120%. And by the end of 2007, prices for apartments and houses in the country reached their peak. The crisis in the Lithuanian real estate market was not felt as strongly as in Latvia or Estonia, and it came here much later. In 2008-2009. the first signs of stagnation began to appear on the Lithuanian housing market: the growth in housing prices slowed down and the number of real estate transactions decreased. In 2008, the cost of housing fell by 15.2%, in 2009 - by 26.8%, in 2010 - by 3%. During this period, many development companies building new projects went bankrupt due to significant cuts in funding from banks and a large number of unsold properties in new buildings. According to the consulting company Ober Haus, prices for Lithuanian real estate decreased by 32% from December 2007 to 2009, actually returning to the level of 2006. Since the beginning of 2010, the country's housing market has stabilized with minor fluctuations. the situation remained, while the number of transactions gradually began to increase. In the 1st quarter of 2012, the average cost of apartments in large cities of Lithuania remained at the same level with minor changes. In Vilnius, prices increased by 0.2%, in Kaunas - by 0.6% and in Klaipeda - by 0.1%. The activity on the Lithuanian real estate market is growing now. According to official data, in the 1st quarter of 2012, the number of transactions for the purchase and sale of apartments and villas across the country increased by almost 10% compared to last year. Despite attractive housing prices, real estate in Lithuania is not purchased for investment, since it will be quite difficult to resell housing here - there are not so many foreign buyers, and the domestic real estate market has slowed down after the crisis. It is not worth counting on a quick return on investment in real estate in Lithuania. Housing is bought here rather for their own use.

Cities and resorts for buying real estate

In Lithuania, foreign buyers are interested in the coastal cities of Palanga, Klaipeda, the unique Curonian Spit, included in the UNESCO World Heritage List, as well as the Druskininkai balneological resort in the south of the country. Before the crisis, housing here could be bought for 3000-5000 euros per sq. m, now - for 1200-2000 euros per sq. m. The city of Klaipeda is located in the west of the country, where the Curonian Lagoon joins the Baltic Sea. Klaipeda is a large seaport that connects Lithuania by ferry service with Sweden and Germany. The average cost of real estate in the prestigious areas of the city is 1,350 euros per sq. m, new housing costs 900 euros per sq. m. A two-storey house near the Baltic Sea can be bought here for about 200,000 euros. To the north of Klaipeda is the equally popular city of Palanga. The average cost per square meter in Palanga is 1200 euros. Part of the unique peninsula Curonian Spit, about 98 km long, belongs to Lithuania, and the other part belongs to Russia. On the Lithuanian side there are the resorts of Nida and Neringa. The offer here is limited, the cost of apartments starts from 150,000 euros. In the old balneological resort Druskininkai, which is located in the southern part of the country, about 130 km from Vilnius, the average price for housing is 1400 euros per sq. m. In Vilnius, local and foreign buyers of real estate, as a rule, choose the Old Town, where the average cost per square meter is 1800 euros, new housing in the city costs 1150 euros per square meter. m. Kaunas is the second largest city in Lithuania, housing prices are lower than in Vilnius. Real estate in this city is more interesting for Lithuanians. The average cost of housing in Kaunas is 1400 euros, while real estate in new buildings costs about 900 euros per sq. m. HomesOverseas.ru