Demand for smaller flats outpacing supply

  • 2003-02-27
  • Vytas Zabilius

Like never before, this year's real estate market has been plagued by a lack of old-fashioned one- and two-room apartments.

The average market price of such apartments ranges from 15,000 euros to 22,000 euros, making them popular among young families in search of relatively easy sales terms.

A booming mortgage market, low annual interest rates of 6 percent and long-term credits (up to 25 years) allow young families with steady earnings to buy the apartment they're living in instead of renting it.

For this reason, there is a dearth of neglected apartments in Vilnius Old Town, as middle-aged residents have begun to invest in real estate. By buying and upgrading resident space Vilniusites can either sell for a higher price or lease to foreigners, thereby supplementing their income.

Demand is highest among young families with good earnings for 60-square-meter apartments in Old Town, ideally on Didzioji, Pilies, Stikliu and Vokieciu streets.

More expensive and bigger apartments located in the center, Old Town and Zverynas area are also in demand. Well-to-do homeowners are looking for apartments in upscale houses with a nice view, usually on the second, third or fourth floors.

If, however, the apartment is on the building's upper floor, clients usually require an elevator, and since many Old Town buildings have high ceilings, living on the fourth floor is almost like being on the "fifth."

Demand for apartments on the upper floors and mansard apartments will increase once elevators are installed.

Residential rental rates, particularly for large apartments, have dropped by some 15 percent in the last six months. For instance, the rent for a well-furnished, 100-square-meter apartment was 1,200 euros per month just a half-year ago; today such an apartment is offered in the 800 euros to 900 euro range.

The highest demand is still for two- and three-room apartments, often rented by EU citizens and officials who live full-time in Lithuania's capital.

Rates for 60- to 75-square-meter apartments range from 500 euros to 700 euros.

Demand for cheaper two- and three-room apartments in newer buildings located in more secluded places as well as for apartments near parks and leafy surroundings, has remained steady.

On the private house market, demand is oriented to smaller 120- to 200-square meter houses, with prices ranging from 111,000 euros to 138,000 euros if the homes are within city boundaries and 55,000 euros to 111,000 euros if they are constructed on the outskirts of town.

Customers with more money to spend usually seek 200- and 300-square meter houses for up to 300,000 euros or more. Highest demand is for homes in peaceful locations near parks and in Vilnius' most prestigious districts -- Antakalnis, Turniskes, Valakampiai, Gudeliai, Baltupiai and Jeruzale.