LITHUANIAN ECONOMIC AND REAL ESTATE MARKET REPORT

? Economic Overview

• GDP Growth: Lithuania’s economy grew 2.7% in 2024, surpassing expectations. The recovery was driven by exports, strong real incomes, and falling interest rates.
• Inflation: Stayed low at 0.9%, but forecasted to rise to ~4% in 2025 due to energy, food, and excise tax increases.
• Wages: Average gross wage rose 10.4% in 2024, outpacing productivity, with an 8.5% increase expected in 2025.
• Unemployment: Slightly increased to 7.1%, projected to decline to 6.8% by 2026.
• Construction: Infrastructure projects surged, especially railways and utilities, while residential construction declined by 2%.

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? Residential Market

Vilnius

• Sales Surge: New home sales up 47%; supply rose 55%.
• Median Prices: Rose 6.7% to €3,318/m².
• Rental Yields: 5–7%, with stable rent prices.
• Challenge: Risk of supply shortage in 2025 despite improved affordability.

Kaunas

• Balanced Market: Sales and supply up ~30%, market indicator at 0.91.
• Median Prices: Grew 11.7% to €2,734/m².
• Yields: Higher than Vilnius at 6–8%.
• Outlook: More developments expected with Rail Baltica boosting interest.

Klaipėda

• Recovery in Sales: +12% in new homes; price median fell 8%.
• Smaller Market: Prone to larger fluctuations.
• Yields: Similar to Kaunas (6–8%).
• Outlook: Mėmelio Miestas expected to revitalize downtown.

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? Commercial Real Estate

Offices

• Vilnius: Office space reached 1.17M m², vacancy 6–11%. Rent stable at €8–20/m².
• Kaunas: Smaller market with low vacancy (2–8%), rents €8–17/m².
• Klaipėda: Limited supply, low vacancy (2–7%), rents €6–13/m².

Industrial & Logistics

• Vacancy: Slight increase, but moderate (~4–6%).
• Rents: Stable. Modern warehouses €4–6/m², older €2.5–4.5/m².
• Demand: Strong but cautious due to high construction costs.

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⚖️ Legal Updates

• Design & Construction Law: Major changes introduced on Nov 1, 2024:
  • Two-stage design process (design proposals & technical design).
  • More documentation and coordination now required.
  • Appearance changes may trigger a new building permit.
• Land Law: State land lease/purchase requires clearer procedures.
• Case Law: New Supreme Court decisions define:
  • Strict liability for building defects.
  • Rules on bona fide mortgage creditors.
  • Criteria for leasing/purchasing state land without auctions.

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?️ Notable Residential Projects (2024–2025)

Vilnius

• Basanavičiaus 28 – Luxury renovation, near 5m ceilings.
• Porto Franko – Family-focused development with green areas.
• Baltupis – Large-scale, nature-integrated community.

Kaunas

• Šilainių Namai – Efficient suburban development.
• Nemunaičiai (Pasaka) – Riverside living with scenic views.

Klaipėda & Seaside

• Arimų Žiedas – Solar-powered mid-range housing.
• Pilkopė (Neringa) – High-end restoration of historic resort building.