Buying real estate in Lithuania

Long story short: If you are looking to make quick money in the Lithuanian real estate market, the time for that has long since come and gone. Prices did drop after the 2008 financial crisis, but not as massive and long lasting as one would expect. Locals offer a variety of explanations to this phenomenon, ranging from the effects of many people working abroad to the obligatory government conspiracy theory, but in my opinion the reason is quite different. It is because of the VERY EARLY WARNINGS about how the country was switching to Euros in 2015. This caused every “spekulant” with a mattress full of Litas to look for an alternative way of investing/hiding his untaxed fortune. Most of them seem to have chosen the rather unimaginative option of buying real estate, with a high property price being the temporary result.

 

Vilnius suburbs, seen from the TV-tower. Although rather overpriced,
this spacious city offers some good Investment opportunities in the years to come.

 

Once these people have gotten their money back in Euros, the situation will probably start to normalize. And the successive dip in the real estate market will of course be blamed on the Euro, Germany or for that matter Merkel personally. In the long run, however, there should be plenty of good opportunities in Lithuanian real estate. The largest Lithuanian cities will continue to grow, in spite of the negative outlooks for population growth in the country as a whole.

 

Kaunas. Like most larger cities in Lithuania, it grows at a much higher rate than the nation.

This is largely due to the fact that very little is being done to maintain the smaller settlements in the countryside, and in time one can expect to see a migration of people from villages to the larger cities. This will of course affect the price of rural properties in a favorable way, but foreign investors looking for real estate in Lithuanian villages are usually few and far between. Those looking for a real bargain can in fact already find a village house in the middle of nowhere at sale for next to nothing, but chances are that it will sell for even less in a few years.

 

The Lithuanian countryside. Although heaven for some, it is not for everyone

 

This is also the case in some of the smaller cities, where particularly small to medium sized apartments can be found at very moderate prices. But the problem here is the same as in the cities – unless demand for housing in that area increases, neither will the value of your property. This makes such real estate mostly attractive for buyers who intend to use the house or apartment for their own purposes. Those people should on the other hand keep in mind that petty theft still is rather common in this part of the world, and that it makes sense not to leave ones property unattended for large parts of the year.

 

A luxury house in Palanga. Not something you would want to leave unattended for
 8 months of the year in a country where people would steal your door knob for the scrap value

 

In my opinion, the best investment opportunities are found in the larger cities, where much land is still available in the citycenters at a rather moderate cost. The best examples being Kaunas and Klaipeda, since the capital Vilnius already has a rather inflated price level. Although, one could also find properties there which will likely increase in value significantly in years to come. Particularly mid-range apartments in the suburbs. Another good option is the coastal region. This is a highly esteemed holiday destination for many Lithuanians, and large parts of it is also the ancestral homeland of many Germans. Such, and other factors, helps keep prices there ridiculously high, and will probably continue to do so also in the future.  

 

An old shack in the old German territory of Neringa. I wouldn`t be surprised if the
asking price is 500.000 euros. It will probably sell for double that in ten years, if it still stands...

 

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