Lithuanian housing market cools as buyer demand wanes

The Lithuanian housing market is showing signs of cooling, with economists forecasting a decline in affordability and a potential drop in transactions next year. While the market remains active currently, with transaction numbers about 4% higher than last year, this surge was fueled by temporary factors that will not persist into 2025.

Rising Euribor interest rates are a significant headwind for potential buyers, making it more challenging to secure a mortgage. This economic pressure is contributing to the anticipated slowdown. Despite the overall cooling trend, there is a notable increase in transactions for individual houses, especially in regions surrounding major cities.

House prices have seen substantial growth over the past year. Outside of the capital, Vilnius, prices increased by 14.7%. In Vilnius itself, the price surge was even more pronounced, with a 21.1% rise. This rapid appreciation, coupled with increasing interest rates, is likely contributing to the current affordability challenges.