Lithuanians who want to live in their own homes, but who are not catching up with prices, have found new directions: prices there are lower sometimes

LRYTAS.LT BUSTAS REAL ESTATE

Residents are increasingly borrowing not only for apartments, but also for the construction or purchase of individual houses , which has been noticed by bankers for some time. When apartment prices jump by almost 20% per year in big cities, when deciding to settle in a house, no matter where, but with a small own patch of land, or in a city where everything is easily accessible, a significant number of Lithuanians do not hesitate for too long.

It is not cheaper to build, but it does not matter Tomas Sovijus Kvainickas, Head of Investment and Analysis at Inreal, one of those who thinks that non-rising apartment prices have become the main reason to borrow more actively for the construction or purchase of individual houses. As apartment prices increased mainly in the second quarter of this year, especially in April and May. Until then, they did not fall, but grew gradually. "In half a year, no one was able to make the decision to build a house and even more so to build it. People may have a desire to build houses themselves at current apartment prices, but apartment prices have not risen just because they have been actively bought. Of course, that was influenced. After all, if the REAL developer sells apartments much faster than planned, then he can increase the price. Sales may slow down a little, but to a level that is still acceptable. The prices of apartments were significantly affected by the prices of construction works. Depending on the NT project, the sq. m. m price jumped both 100 and 1 thousand. €100 million," explained the expert. The interlocutor pointed out that real estate developers buy large quantities of building materials, order a lot of construction works, and therefore prices on apartment building sites are quite different from for a private person building the most popular 100 sq. m. m area house in Kaunas and Klaipėda or 130 sq. m. m area of the house in Vilnius. That alone, in the opinion of T. S. Kvainickas, does not allow to say that the house has become a cheaper alternative to the apartment. Construction is also cherished by the infrastructure development tax introduced almost a year ago. If re-developers build with a construction permit issued in 2018-2020, they are not subject to the Infrastructure Development Fee. As for individual houses, it is also possible to find plots that are sold already with a building permit, but such cases are rare. In any case, for the builder of an apartment building with 50-100 apartments, the Infrastructure Development Tax will not be as painful as when building an individual house.

Residents are increasingly borrowing not only for apartments, but also for the construction or purchase of individual houses , which has been noticed by specialists for some time. Photo by V.Skaraitis It is noticed that the purchase of individual houses became more and more active after 2013. The number of apartment transactions then grew relatively slowly. And here's a growing number of houses being built every year, for almost a decade. In 2020, the largest number of individual houses were built in Vilnius region. In Kaunas region, by the way, almost the same number of houses are built as in the capital. It is likely that the attractiveness of individual houses will grow even more, although their area, which is one of the main reasons for choosing a house rather than an apartment, decreases every year. If in 2000 to build approximately 200 sq. m. meters of houses, in 20 years their area has decreased to about 136 sq. m. on average– up to 100 sq. m. in Kaunas and Klaipėda. m. Median average area of the apartment – about 50 sq. m. meters, i.e. the houses under construction are still twice as large as the apartments. If it was previously customary to install cellars and garages in the house, which increased the area of the building, now they are abandoned. It is estimated that there are about 900 000 people in Lithuania. apartments, another 50 000. – non-residential premises (hotels, lofts, cottages consisting of almost 50 thousand more). Individual houses – about 550 thousand. "The individual home market accounts in principle for two thirds of the apartment market. If we look at activity, if vilnius city municipality is rejected, the market would be distributed about as follows: one third of it is houses, two thirds of apartments. It is also important that about half of the houses, in contrast to apartments, are built for themselves to live in. Sometimes the developer, having completed the construction of the apartment building, stays the most beautiful apartment on the last floor, but it will be only one apartment in the entire apartment building. The individual home segment is active enough, only to the extent that in Vilnius, when prices are slightly higher, the apartment segment is very strong. Meanwhile, in the rest of Lithuania, the home segment lands little on apartments," commented the interviewer.

Residents are increasingly borrowing not only for apartments, but also for the construction or purchase of individual houses , which has been noticed by specialists for some time. Photo by V.Skaraitis How much has the market been adjusted by the Infrastructure Development Tax, which has been in force for almost a year, which has led to both builders and municipalities breaking the spear? "Let's imagine that if in the capital Pilaitė a new-build apartment sq. m. a meter costs 1000 euros, it is construction work, the price of a plot of land, VAT would be between 900-950 euros per sq. m. m. Developer's net profit would remain 50 euros per sq. m. Pilaitė is not a priority area, so the Infrastructure Development Fee here would amount to EUR 50 per sq. m. m, which means that the real realm developer would be left without earnings. Everything would be solved by increasing the price to 1050 euros per sq. m. m, the buyer would pay a little more, but that amount would not be particularly significant. However, if the price increase fails and the REAL developer is left without profits, he would certainly consider building where house sales prices are relatively low. When building in the Old Town, where land plots are more expensive but sales prices are much higher, approximately 2000-3000 thousand. Eur 100 million per sq. m. m, Infrastructure development fee relatively symbolic – 18 euros per sq. m. Thus, when it comes to prestige housing, the impact of this tax is limited and the economic impact is more significant. As for individual houses, those who build a house for themselves will not overstate whether the sq. m. m will cost 1000, or 1050 euros. Building for $100,000 or 120 000 The amount of the fee is approximately EUR 6 000. This is not very significant," he said. The innovations were resisted, but the residents of Kaunas district came to terms with the very active purchase and construction of houses. As explained by specialists of the Infrastructure Development Division of Kaunas District Municipality, by the end of October more than half a thousand contributions had already been charged. The average amount of one contribution amounts to almost EUR 5,200.

Residents are increasingly borrowing not only for apartments, but also for the construction or purchase of individual houses , which has been noticed by specialists for some time. Photo by V.Skaraitis Since the very beginning of the application of this law, Kaunas District Municipality has been paying great attention to consultations and provision of information in order to make it as clear as possible for both residents and designers how the VRA works and how it is applied. Residents and businesses are interested in the possibilities to conclude municipal infrastructure development agreements, because in such a case not only the free infrastructure development contribution, but also compensation for the municipal infrastructure installed at their expense from the contributions paid by other contributors.

Kaunas District Municipality has an online payment calculator where you can check what contribution rate is applied in a particular territory.

Siauliai does not want a small area of houses for design and construction work, mainly in šiauliai region, engaged Robertas Joniškis for the portal lrytas.lt said that, as his practice shows, people are into small, for example, 80 sq. m. m, the area houses are not looking, unlike in Vilnius or Kaunas, where houses of a smaller area are easier to afford. In Siauliai it is customary to build or buy houses of medium (120-130 sq.m). Also, future settlers prefer a plot of more than 2 or 3 acres, at least 6-7 acres. R. Joniškis agrees: since apartment prices are high, and for a similar price to build a house, although not fully equipped, it is possible, and more and more people are doing it. "Over time, you will create a final, more liquid, product that will have a higher value. In addition, you will have your own area where you can spend your time," my interlocutor says. Although he built a number of houses, the cellars, as far as he can remember, had to be installed in only two. Only people who are not limited by the budget choose the basement. The garage, on the contrary, is still relevant, although it is not at the top of the list of priorities. If there is a garage in the house, it is a great advantage, but if not – a pantry, gazebo or shed is installed. As Robertas said, he started construction not only in Šiauliai region, but also in Palanga. At the same time, he admits – the price of real realm in the resort is certainly not for everyone to bite. On the other hand, there are especially active intermediaries who want to earn a lot. Regions going through a golden age? The Centre of Registers has just announced that according to the annual growth of the number of residential transactions this year, akmenės (annual growth – 60 per cent), Jurbarkas district (41 per cent), Kėdainiai district (43 per cent), Klaipėda city (92 per cent), Kretinga district (41 per cent), Lazdijai district (41 per cent), Šalčininkai district (49 per cent) and Vilkaviškis district (41 per cent) stood out.

Mindaugas Kulbokas, Head of research and analytics group at Newsec in the Baltic region, believes that demand for detached houses in individual regions is due to the COVID-19 pandemic and opportunities to work and study remotely. "Let's imagine a student from Jurbarkas district who studied in Vilnius: he had to attend lectures, so to live in the capital. Now, at least partially, it is possible to learn remotely and live in your own land. This also applies at least in part to people working in the service segment (for example, working in a customer service call center). Districts are becoming a priority for people who appreciate the slower pace of life.

Pagaliau aiškiai ir tiksliai suskaičiavo, kiek per metus Vilniuje brango būstas – įspūdinga Prestižinį būstą lietuviai vis dažniau perka naudodamiesi išperkamąja nuoma Įvertino 10 mėnesių taikant Infrastruktūros plėtros įstatymą: neramina vienas sprendimas. Iš atokaus Kirtimų rajono iškraustyti narkotikų prekeiviai savo veiklą tęsia arčiau sostinės centro. Kita, bet jau banali priežastis yra ta, kad šeimos iš emigracijos grįžta į gimtuosius miestelius. Pragyvenimo lygiui augant, plečiantis pramonei, atsiranda motyvas grįžti į Lietuvą, į savo gimtąsias vietas – tai dar vienas individualiųjų namų augimo paaiškinimas. O ir kainos regionuose daug palankesnės įsikurti bei tikėtis didesnio komforto (ploto, kambarių skaičiaus). Galiausiai, gamtos artumas kartais suvaidina lemiamą vaidmenį“, – kalbėjo pašnekovas.

Source: Lithuanians who want to live in their own homes, but do not catch up with prices, have discovered new directions: prices there are lower sometimes (lrytas.lt)