Secondary Homes in Lithuania: A Market at a Turning Point

Published on January 17, 2026 and written by Cyril Jarnias

Long considered a niche market, the second home market in Lithuania is now establishing itself as a true strategic segment of Lithuanian real estate. Between the rise of remote work, the explosion of short-term rentals on the Baltic coast, the growth of small spa towns, and a continuous – yet more controlled – price increase, vacation homes have become both a quality-of-life project and an investment product.

A generally dynamic but stabilizing residential market

The Lithuanian real estate market experienced a spectacular surge between 2020 and 2022, before entering a normalization phase. This backdrop is essential for understanding the evolution of second homes.

Housing prices have almost doubled since 2015, with a cumulative increase of about 187%. Over the last decade, the average growth remains around 5 to 7% per year, but the peak of 2021‑2022 – with increases exceeding 20% in some areas – has given way to more moderate growth. In 2023, apartment price increases in major cities were only 9.08%, and, once inflation is taken into account, real prices remained stable.

Comparison of average prices per m² in major cities

City	Avg. apartment price (€/m²)	Recent annual change*
Vilnius	≈ 2,646 – 2,680	+2.1% to +2.8%
Kaunas	≈ 1,790 – 1,926	+3.3% – 3.5%
Klaipėda	≈ 1,704 – 1,816	+5.4% – 6.3%
Šiauliai	≈ 1,131	+3.4% – 6.4%
Panevėžys	≈ 1,109	+4.1% – 6.7%

*According to indices published for 2024–2025.

This deceleration in price increases is accompanied by a decrease in the number of transactions in 2023 (30,557 sales, the second lowest level of the decade), followed by a gradual restart in 2024‑2025. At the same time, housing starts and building permits are declining, creating a structural supply deficit, particularly in Vilnius and the most sought-after areas of the coast.

For second homes, this context translates into pressure on premium locations – Baltic coast, spa resorts, small tourist towns – and faster price increases than in the primary market in some high-end segments.

From luxury vacation home to a post-Covid “must have”

The pandemic profoundly changed Lithuanians’ relationship with second homes. A survey conducted in Vilnius with 1,210 residents showed that already in 2020, 17% of people considering a real estate purchase or a move were thinking about a vacation home in a seaside resort or the countryside. What was perceived as a luxury became, for a portion of the population, a necessity.

The profile of the people most interested in acquiring a second home is revealing: 46‑55 year-olds form the most motivated core (37% of potential vacation home buyers), followed by 36‑45 year-olds and even young adults (15% of 18‑25 year-olds). There is an overrepresentation of managers and executives, but also students and homemakers, highlighting that the phenomenon affects both affluent households and groups seeking flexibility and quality of life.

Remote work, the right to work remotely, and “workcation”: a massive driver

The Lithuanian legal framework plays a significant role in this transformation. The Labor Code recognizes and regulates remote work: an employee can request to work remotely, the employer cannot sanction a refusal to telework, and for certain categories (pregnant women, parents of young children, etc.), the employer is even required to accept a portion of remote work representing at least 20% of working hours, unless excessive cost is demonstrated.

At the European level, studies on remote work show that the share of employees working occasionally from home has more than doubled in twenty years and exploded during the pandemic. In Lithuania, this “normalization” of remote work translates into a gradual migration to small towns, green areas, and coastal or spa resorts, provided the internet connection is reliable. The second home market directly benefits from this trend: a country house or a seaside apartment can serve as a part-time office, strengthening the incentive to invest there.

The Baltic coast: Palanga, Šventoji, Klaipėda… and the luxury price drift

The Lithuanian coastline is at the heart of the second home market. Palanga, Nida, Šventoji, and the coastal districts of Klaipėda attract both Lithuanians and foreign investors seeking a vacation property with high patrimonial value.

Palanga is the showcase of this movement. Prices per square meter in the most prestigious area – from Birutė Park to the lively center of J. Basanavičiaus Street – now rival some Mediterranean resorts. Within this perimeter, several new high-end projects are under development, and apartments can sell for between 10,000 and 15,000 euros per square meter with partial finishes. For a home of about 50 m², the entry ticket is thus between 500,000 and 750,000 euros, to which must be added furnishings, a parking space, and finishing touches, easily bringing the total bill close to one million euros.

Example of price ranges for a new project in “prime” Palanga

Cost element	Order of magnitude
Price per m² (partial finish)	10,000 – 15,000 €/m²
50 m² apartment	500,000 – 750,000 €
Parking + furnishing	+100,000 – 250,000 €
Possible total cost	≈ 700,000 – 1,000,000 €

This price inflation on the coast has a direct consequence: some high-income households are starting to compare investing in a second home in Palanga or Nida with buying an equivalent property in France, Spain, Italy, or even Dubai. Real estate professionals thus report that many Lithuanians have a budget between 0.5 and 1 million euros for a property abroad, attracted by yields of around 7% in markets like Dubai, and by a service offering (pools, spas, concierge) sometimes more developed than on the Baltic coast.

In Šventoji, an emblematic example illustrates the new expectations: the “Gates of Šventoji” residential project, composed of 16 small buildings in immediate proximity to the Baltic Sea and the Šventoji River, offers apartments from 32 to 104 m², often sold fully finished and furnished. Website visits for the project multiplied tenfold year-on-year, including outside the summer season, showing that demand is no longer only seasonal. Buyers seek a quiet environment, quick access to the beach, views of greenery, but also the possibility of easily renting the property short-term.

Spa resorts and nature towns: the discreet boom of Birštonas, Druskininkai, and Trakai

Lithuania is not just the sea. Spa resorts and nature towns are experiencing a second youth and attracting more and more second home buyers.

Trakai, with its famous island castle, attracts thousands of visitors every year. Prices are increasing there but remain lower than in the capital, making it a relatively affordable second home option for Vilnius households seeking a weekend retreat.

Example of price/rent difference between capital and small town

Location	Estimated price per m²	Typical apartment price	Estimated monthly rent	Approx. gross yield
Vilnius, central district	≈ 3,000 €/m²	50 m² ≈ 150,000 €	≈ 400 €/month	≈ 3.2%
Small town (e.g., Vievis)	≈ 600 €/m²	50 m² ≈ 30,000 €	≈ 300 €/month	≈ 12%

This type of gap is now attracting private investors to destinations once overlooked, such as Vievis, Elektrėnai, Kėdainiai, or Marijampolė. These secondary markets, sometimes industrialized and well-connected, combine low purchase prices, low rental competition, and solid demand, making them natural candidates for a profitable second home.

Vilnius and Kaunas: when the second home becomes as active as a rental investment

Even if the term “second home” spontaneously evokes the sea or countryside, a significant portion of Lithuanian second homes are located in major cities, mainly Vilnius.

In Vilnius, the appeal stems from several factors: strong demographic growth (the population has surpassed 600,000), influx of foreign workers and international students, strength of the rental market (low vacancy rates, rising rents), but also the perception of the capital as a safe-haven asset. Investors consider the Old Town and certain central districts as a safe way to “protect” their capital, even if rental yields are lower there (around 4% for central apartments).

The gross profitability in the capital, however, varies significantly depending on the neighborhood and size:

City / neighborhood (indicative)	Average gross yield	Comment
Vilnius center (apartments)	≈ 4.0%	High demand, high purchase prices
Vilnius overall	4.9% – 5.6%	Average yield for the entire city
Kaunas	≈ 5.8%	Developing market
Klaipėda	≈ 6.2%	Coast, tourism, and remote work
Small / tourist towns	10% and more	Limited supply, sustained demand

Micro-apartments under 20 m² have multiplied in some Vilnius neighborhoods, targeting students and professionals spending part of the week in the capital. These products, if well-located, combine dual use: a pied-à-terre for an owner living in the region (who uses it as their “urban second home”) and a high-yield rental investment the rest of the time.

Seasonal rentals and second homes: an almost inseparable couple

The vacation rental market is one of the best thermometers for the dynamism of second homes. A recent report on the Lithuanian vacation rental market highlights the growth in revenue and listing volume, as well as a gradual shift toward this type of accommodation to the detriment of traditional hotels.

Short-term rental (STR) figures in major cities illustrate the rise of this segment well:

City	Nbr. of active STR properties	Avg. monthly revenue*	Avg. occupancy rate	Avg. ADR*
Vilnius	≈ 1,508	≈ $900	≈ 40.8%	≈ $91
Palanga	≈ 829	≈ $467	≈ 25.4%	≈ $118
Kaunas	≈ 657	≈ $725	≈ 38.1%	≈ $78
Klaipėda	≈ 421	≈ $540	≈ 32.5%	≈ $88

Amounts indicated in the report in dollars; rounded values.

On the coast, Palanga shows very high daily revenues during peak season, but also strong seasonality. A well-rated property can generate over $27,000 in annual revenue with a nightly rate of about $140, provided the summer period is well managed.

For a second home owner, this possibility to alternate personal use and seasonal rental is central. The following combination dominates in seaside and spa resorts:

– Personal use for a few weeks of vacation (often in summer or during treatment periods),

– Short-term rental targeting tourists and remote workers the rest of the time,

– Prospect of long-term capital appreciation in a structurally supportive market.

In small tourist towns (spa towns, natural parks, lake areas), demand for short-term accommodation is growing, supported by the rise of domestic tourism and “well‑being” stays. Rental yields there are often higher than in the capital, for a significantly lower entry cost.

Financing and taxation: rules to master for a second home

Acquiring a second home in Lithuania involves dealing with a fairly specific financial and tax framework, especially for non‑residents.

Regarding financing, local banks generally require a higher down payment for a second home than for a primary residence. In a European context where down payments required for vacation homes are often between 20% and 40% of the property value, Lithuanian practice is moving toward financing not exceeding 60% of the price for a vacation home, the rest to be covered by savings or other guarantees. The maximum debt-to-income ratio remains strictly monitored: monthly payments must not exceed about 40% of net income.

For foreign investors, access to credit is more complicated: banks favor individuals with a permanent residence permit and income in euros, declared in Lithuania. Non‑residents often must rely on banks in their home country or alternative structures, such as crowdfunding platforms.

On the tax side, the system is relatively simple but can weigh on the profitability of high-value second homes:

These rules encourage careful trade-offs between property size, location, rental potential, and holding period. They also explain why many investors opt for modest-sized apartments in highly sought-after locations, rather than large villas imposing a heavier tax burden.

Legal framework and conditions for foreigners: a rather welcoming environment

Lithuania remains generally open to foreign investors, especially for standard residential properties. Citizens of the European Union and the European Economic Area enjoy the same rights as Lithuanians. Essential restrictions concern the acquisition of agricultural or forest land, certain sensitive coastal or border areas, and, on a temporary basis, Russian nationals without a residence permit.

However, purchase does not automatically grant a residence permit. Ownership can simply serve as “proof of anchoring” to support an application based on other criteria (economic activity, employment, studies, family ties).

For investors who primarily want to capture part of the profitability of the second home market without buying directly, the rise of real estate crowdfunding provides an alternative. Lithuanian platforms specialized in rental property (like InRento or Profitus) allow entry into small or medium-sized projects, sometimes starting from 10 euros, with advertised yields around 10–12% on some placements backed by residential or tourist real estate.

Climate pressures and regulation: what long-term risks?

Investing on the coast or in natural areas requires taking into account climate risks and regulatory policies.

Simultaneously, public authorities are gradually strengthening the regulation of short-term rentals in some tourist centers, to preserve the market for permanent residents and control pressure on infrastructure. While Lithuania has not yet adopted policies as drastic as some major European capitals, investors must integrate this regulatory risk in the medium term, especially since specific taxes on second homes in urban areas and increased control of rental platforms have already been discussed.

Outlook: a multi-speed second home market

In the coming years, the dynamics of the second home market in Lithuania should remain globally positive, but very contrasted by area.

On the coast, demand will likely not weaken, driven by domestic tourism, remote work, and the appeal of the coastline. The main risk lies in the continuation of price increases disconnected from the offering of year-round infrastructure. If new projects integrate more services (spas, coworking spaces, private clubs), Palanga and Nida will retain their status as “symbols” of the Lithuanian second home; otherwise, the highest budgets might migrate abroad.

In major cities, finally, the second home takes on more hybrid forms – urban studio for students or professionals, central apartment combining personal use and seasonal rental, micro‑apartment in a gentrifying neighborhood – but remains driven by economic growth, urbanization (nearly 70% of the population now lives in cities), and Vilnius’s appeal as a technological and academic hub.

In this context, Lithuania appears as an interesting laboratory on a European scale: a country where the homeownership rate exceeds 88%, where real estate remains relatively affordable compared to Western Europe, but where the second home is transitioning from the status of a seasonal privilege to that of a pivot for a new way of living, working, and investing.