Answered whether rental housing in the capital will continue to rise: compared prices in Vilnius and Western Europe
The rental prices in Vilnius are expected to remain stable this year compared to last year's average of 14.8 euros per square meter, while prices for housing for sale are projected to increase.
In Vilnius, the average rental price reached 14.8 euros per square meter last year, and according to Ugnis Latvia, the head of the real estate development company KAITA Group, this figure may remain stable or even slightly decrease this year. This stability is attributed to the lack of significant conditions for rental price increases as the supply of older construction housing is not diminishing, contrary to the trend in the housing sale market where prices are forecasted to rise by 7β9 percent this year.
The rise in prices for homes sold is primarily driven by the high demand outpacing the supply of newly constructed housing. In contrast, the rental market is dominated by older properties which are continuously aging, thus there is no pressing shortage that would necessitate a rise in rental prices. However, the situation is different for newly constructed rental properties, where prices remain higher and could increase again should there be a shortage in supply, affecting both traditional and co-living accommodations.
The analysis highlights that community housing is expected to encounter new trends this year, suggesting a shift in market dynamics that could impact demand and pricing strategies. This indicates a broader reflection on the economic landscape in Vilnius, with potential implications for both renters and investors in the real estate market as they navigate through these leasing and purchasing challenges.