Analytics, Lithuania, Real Estate

"Increasing gross earnings, increasing savings, higher expectations and historically low interest rates will continue to be factors influencing growing demand for housing. However, as housing supply has currently increased, we should not expect price growth this year," says Maciulis.

The growing rental return for apartments which shows the proportion of value that can be earned per year while renting a flat, shows that purchase of housing becomes more attractive than renting.

Maciulis says that rental return is still below long-term historical average, therefore based on this measure apartments in the largest Lithuanian cities are still overvalued.

Currently rental return in Vilnius city stands at 6%, whereas the average last decade rate was at 6.2%. Such gap is even higher in Kaunas city, currently it is 6.6%, while the historic average was 8%.