Vilnius region is driving the whole real estate market in Lithuania

In the third quarter of 2013, year-on-year increase in the volume of constructionworks made up 15.3 per cent at constant prices on an annual basis.

The number of apartments completed increased by 41.2 per cent, with this sort of growth the popularity of apartments is beginning to look a lot like what is seen in los angeles apartments. 63 per cent of apartments were completed in detached or semi-detached houses. 55 per cent of total apartments completed were in Vilnius country, 17 per cent in Klaipėda county and 14 per cent in Kaunas county. At the moment, Vilnius region is driving the whole real estate market in the country due to increasing demand which absorbs existing supply and stimulates new construction.

In the third quarter of 2013, the number of new licenses for construction of residential buildings increased by 33 per cent as compared with the same period of 2012. An increase in the number of construction licenses signals sustained gradual recovery of construction market in the coming years. According to some real estate agencies, rapid increase in the number of construction licenses may even reflect too fast increase in supply which may result in illiquidity of some residential projects.

During the third quarter of 2013, the area of completed non-residential buildings increased by 23.7 per cent on an annual basis. Trade, accommodation and catering buildings made up almost a third of total non-residential construction. Quite surprisingly, Kaunas took the lead in non-residential construction as 31 per cent of non-residential buildings were completed in its county, 21 per cent in Vilnius county and 13 per cent in Klaipėda county.

In 2013, land was taxed according to new rules, which envisage taxation of land’s market value (as opposed to indexed value disregarding the purpose of land) and allow municipalities applying different tax rates, ranging from 0.01 per cent to 4 per cent. Had all the municipalities applied the maximum rate of 4 per cent, the revenues from land tax would have reached LTL 1 billion per year while in 2012 it stood at LTL 62 million only.

Photo: Vilnius | © Ingvar Henry Lotts

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