What's Happening in Lithuania's Real Estate Market – Record Supply, Yet Prices Continue to Rise

The first half of this year has presented Lithuania's real estate market with what may seem like a contradiction at first glance – Vilnius and Kaunas have reached record levels of new housing supply, yet property prices have continued to increase.

"Vilnius currently has around 5,500 unsold apartments available on the market. We've never seen anything like this before," says Viktorija Čijunskytė, CEO of the crowdfunding platform PROFITUS. However, according to her, this does not mean that prices are about to fall – over the past year, apartment prices have increased by approximately 7% in Vilnius and as much as 14% in Kaunas. Meanwhile, the supply of rental properties remains at a record low.

Activity is also evident in the crowdfunding market. During the first half of the year, Lithuanian crowdfunding platforms financed one-third more projects than during the same period last year, while the investor community was strengthened by individuals who benefited from recent pension system reforms.

However, according to Rokas Rakauskas, Head of Sales at PROFITUS, the country's greatest untapped potential still lies in residents' savings.

"Lithuanians currently hold around €35 billion in short-term deposits and bank accounts. That's an enormous amount of money that remains uninvested and is not working for its owners," says Rakauskas.

As inflation rises, leaving money in bank accounts becomes an increasingly costly choice.

"If inflation is 5.5% and your money is doing nothing, you're effectively losing value," Čijunskytė reminds.

To learn why more and more real estate developers are choosing crowdfunding, how pension reform is influencing the market, and what new opportunities are emerging for investors, listen to the "Verslo tribūna" discussion featuring Viktorija Čijunskytė, CEO of PROFITUS, and Rokas Rakauskas, Head of Sales at PROFITUS.