Published on and written by Cyril Jarnias
The Lithuanian real estate market is experiencing a paradoxical phase: prices continue to rise at a sustainable pace, rental prices remain dynamic, interest rates are gradually receding, while construction shows signs of slowing down. In the background, a growing economy, accelerated urbanization, an influx of foreign workers and refugees, and a sharp turn toward sustainable, energy-efficient housing.
This combination of factors paints a complex landscape, which nevertheless remains attractive for investors as well as for first-time homebuyers. A dive into the major trends currently reshaping the Lithuanian real estate market.
A Market Stabilizing, but Still Rising
After the surges of 2021‑2022, where some areas saw annual increases of over 20%, Lithuania has clearly entered a phase of more moderate growth. Prices continue to rise, but at a pace considered healthier.
Residential real estate prices have increased by approximately 187% since 2010.
A simple comparison illustrates this change of scale: a 100 m² apartment that sold for about €160,000 five years ago now trades for around €254,000. In other words, long-time owners have seen a substantial portion of their wealth appreciate.
Despite rising prices, analysts are not talking about a real estate bubble. This valuation is based on solid economic fundamentals: GDP growth, rising wages, urbanization, and sustained rental demand. The slowdown in the pace of increase observed over the past two years is seen as a sign of market normalization, not a downturn.
Price Indices at Record Levels
Several indicators illustrate this trajectory. The national residential real estate price index reached over 247 points (base 2015=100) in early 2025, representing growth of approximately 9% year-over-year and over 2% quarter-over-quarter. Another index, calculated on a base of 2010=100, peaks above 300 points.
Recent history, however, reminds us of the possible volatility of the Lithuanian market: in 2007, the annual increase exceeded 30%, before abruptly reversing to -33% in 2009. This memory fuels great caution among regulators and market players today, hence the importance placed on the sustainability of current growth.
Vilnius, Kaunas, Klaipėda: The Driving Trio, but ‘Smaller’ Cities Accelerate
The Lithuanian real estate market is decidedly urban. In 2023, nearly 68.4% of the population already lived in cities, and urbanization continues to gain over 1.7% per year. Demand is heavily concentrated in the five major metropolitan areas, while many small towns and rural areas see their activity stagnate or even decline.
To measure the gap between markets, simply compare the average prices per square meter in the main cities.
Price Levels in Major Cities (Residential, Apartments)
| City | Average Price (€/m²) mid‑2025 | Recent Annual Increase |
|---|---|---|
| Vilnius | ~€2,680–2,770 / m² | +5.8% |
| Kaunas | ~€1,846–1,926 / m² | +8.4% |
| Klaipėda | ~€1,752–1,816 / m² | +7.6% |
| Šiauliai | ~€1,172–1,212 / m² | +7.2% |
| Panevėžys | ~€1,149–1,192 / m² | +8.1% |
Vilnius remains by far the most expensive market, especially in its historic center and the most sought-after neighborhoods, where new, high-end developments often exceed €3,300/m² and can even approach €4,900–5,000/m² at the absolute elite level. At the other end of the spectrum, Soviet-era buildings in some peripheral neighborhoods still trade around €1,200 to €1,500/m².
The cities of Kaunas and Klaipėda, long considered much more affordable, have recorded cumulative price increases of 25 to 30% over the past five years. They are now emerging as credible urban alternatives to the capital, although cheaper, and are undergoing rapid transformation. Their dynamism is driven by industry and tech for Kaunas, and by port activity and tourism for Klaipėda.
A notable fact is that the secondary markets of Šiauliai and Panevėžys have recently recorded the strongest annual increases, exceeding 6% year-over-year. These cities still offer average prices around €1,150–1,200/m², attracting a new wave of buyers seeking a more accessible entry point to the market.
Transaction Volumes on a Rollercoaster, but a Rebound in 2025
While prices would continue to rise even if sales slowed, the reality is more nuanced. After a peak in 2021 with over 55,000 real estate transactions, the market cooled significantly. In 2023, the number of housing sales fell to just over 30,000, one of the lowest levels of the decade.
Approximately 4,200 homes (3,100 apartments and 1,100 houses) were registered monthly nationwide in the first half of 2025.
This recovery in activity is largely explained by the gradual easing of credit rates and the stabilization of prices. After a 2022‑2023 phase marked by the surge in EURIBOR, average mortgage rates began to decline in 2024, from about 5.7% at the start of the year to 4.55% in the fourth quarter. In 2025, the average for new loans is around 3.7–3.9%. At the same time, the annual volume of new housing loans jumped by nearly 25% in 2024 to reach €2.17 billion, with a further very strong increase in the first months of 2025.
In this context, the market has regained momentum, particularly in new construction in Vilnius where sales have literally exploded.
Vilnius: A Very Dynamic New Build Market, but Supply-Side Tensions
The capital concentrates most of the spotlight. In the primary market, 2024 marks a turning point: over 3,100 new homes were purchased directly from developers, about 43% more than in 2023. Including reservations, over 3,280 units found buyers, with a particularly sharp acceleration in the second half of the year.
Paradoxically, the surge in sales comes as the production of new housing is declining sharply. Developers only brought 2,589 apartments to market for sale in 2024, a drop of nearly 47% compared to 2023. For 2025, projections are for about 3,300 units, a level still below that of 2023.
This gap between a demand that has become vigorous again and a declining supply raises a risk of tension in several segments, particularly mid-range new properties, which now represent the majority of production.
Structure of New Supply in Vilnius in 2024
| Price Segment | Share of New Supply |
|---|---|
| Economy | ~40% |
| Mid-Range | ~46% |
| Prestige / High-End | ~14% |
The stock of available new housing still increased throughout 2024, from about 3,560 to 4,536 units, as the accumulated supply grew with the launch of new projects followed by an absorption period. But this safety cushion could diminish if sales continue on this trajectory and if the flow of new projects does not keep up.
The primary market balance index in Vilnius in 2024, approaching the equilibrium zone between sellers and buyers.
Kaunas and Klaipėda: Supply Booming, Demand More Cautious
Kaunas presents an almost opposite scenario. Boosted by industrial investments and the establishment of technology companies, the city experienced a real boom in building permits in 2023. Developers put nearly 1,500 apartments up for sale that year, 45% more than the previous year, and about 1,500 other homes were in preparation—a level unmatched since 2008.
In 2024, transactions in new builds in Kaunas reached nearly 800 sales, a one-third increase from the previous year.
In the rental sector, this abundance of new apartments is expected to lead to a rise in the vacancy rate and downward pressure on some rents, at least in the short term. The same questions arise in Klaipėda, where residential construction activity remains strong, particularly to meet seasonal demand and coastal tourism development.
A Robust Economy as the Market Engine
The evolution of Lithuanian real estate cannot be separated from the macroeconomic context. After a clear slowdown in 2023, the economy has regained momentum. GDP grew by about 2.7% in 2024 and by 3.2% year-over-year in the first half of 2025. Forecasts for 2025 and 2026 hover around 2.8–3.1% per year.
This growth rests on several pillars: a rebound in industry, good performance in retail trade (nearly 5% volume sales growth in 2024), strongly progressing infrastructure construction, and, above all, positive dynamics in household incomes. In Vilnius, wages grew by over 9% on average in 2024, exceeding the rise in real estate prices. A similar, though less marked, trend is observed in other major cities.
A Vilnius resident can buy on average about 7 m² of a mid-range apartment with their net annual salary.
On the employment front, the unemployment rate remains contained around 7%, although some categories, such as men, experienced a temporary peak above 7.3% at the end of 2023. The increase in qualified positions in tech, financial services, and export-oriented industry has helped support housing demand in major urban centers.
Urbanization, Migration, and Demographic Pressure on Cities
One of the most striking features of the current Lithuanian market is the country’s demographic reconfiguration. The overall population remains fragile in the long term due to a low birth rate and chronic emigration, but since 2022, several new forces are playing in the opposite direction: partial return of Lithuanians who went abroad, massive influx of Ukrainian refugees, and immigration of workers from Belarus, Russia, and other countries.
Vilnius surpassed the symbolic threshold of 600,000 inhabitants in 2024, with growth of nearly 1.7% over the year.
To this movement are added two specific flows that are highly structuring for the real estate market.
First, the explosion of the expatriate and student community in Vilnius. The capital now hosts nearly 73,000 expatriates, and enrollments of international students climbed by 20% between 2021 and 2023. At Vilnius University, out of more than 7,300 new students at the start of the 2024 academic year, over 3,000 came from abroad, even though the university housing stock can only accommodate about 5,500 students. The difference logically spills over into the private rental market.
A German brigade of about 5,000 people (soldiers and families) will be stationed near Vilnius and Kaunas between 2025 and 2026. This arrival will increase pressure on the rental market, particularly for modern, medium-sized homes in well-connected neighborhoods.
At the same time, many small towns and rural areas are seeing their attractiveness diminish. For several years, demand there has been declining, with housing transactions down over 14% in some segments in 2022. Rental yields there are expected to decline, while prices rise much more slowly than in urban areas and often remain below €1,000/m².
A Rental Market Under Pressure, Especially in Vilnius
The combination of these demographic trends, the rise of remote work, and the costs of homeownership explains the remarkable strength of the rental market, particularly in the capital.
In Vilnius, rents skyrocketed by nearly 27% in 2022, then by over 10% in 2023, before slowing to about a 3% increase in 2024. Between January and July 2024, they still rose by over 6% on average. The levels reached are significant: a two-room apartment in a central neighborhood often rents for around €900 per month, with large variations depending on location and quality. High-end homes in the most prestigious neighborhoods can exceed €1,500 to €4,000 monthly, with some large houses even reaching €5,000 to €6,000.
Despite rising prices, demand for rental housing remains strong in Vilnius, particularly near business districts and university campuses. In 2023, the number of listings on the secondary market even slightly decreased. Professional supply (residences and coliving) is developing but remains insufficient to meet needs.
In 2024, four new managed rental complexes were added, bringing the total to about 2,500 units, with only 200 additional units planned for 2025. This is little compared to the scale of demand fueled by young professionals, students, expatriates, and soon, soldiers and their families.
Rental Yields: Lithuania at the Top of the Baltic Podium
This rental tension translates into gross yields that are still attractive on a regional scale. Nationally, residential yields hover around 6.2–6.4%, with a slight decline since 2023. Vilnius, due to higher prices, offers slightly lower average yields, around 4.8–5.5%, but which can climb to 8% for well-located smaller homes.
Šiauliai displays average rental yields above 8%, making Lithuania one of the most lucrative markets in the Baltic countries.
Interest Rates Receding: A Breath of Fresh Air for Buyers
The trajectory of interest rates was one of the main risks weighing on the Lithuanian market between 2022 and 2023. Average mortgage rates went from less than 2.5% to over 5.7% in just over a year, following the sharp rise in EURIBOR decided by the European Central Bank. This increase squeezed household affordability and slowed many purchase plans.
In September 2025, the average mortgage rate in Lithuania is around 3.9–4.3%.
In practice, banks most often apply a variable rate scheme, based on EURIBOR plus a margin of 1.5 to 2.5 percentage points, although fixed-rate offers for five years exist, usually a bit more expensive. Loan terms can go up to 30 years, with a required down payment of around 15‑20% of the price for residents, and often 30‑40% for non-resident foreigners.
Typical Conditions for a Home Loan
| Profile | Minimum Down Payment | Max. Term | Indicative Rate |
|---|---|---|---|
| EU Resident | 15–20% | 30 years | ~4–5% (fixed or var.) |
| First-Time Buyer | 10–15% | 30 years | possible subsidies |
| Non-Resident outside EU | 30–40% | 25–30 years | ~5–6% and more |
Access to credit remains strictly regulated: banks require that total repayment charges do not exceed 40 to 50% of monthly net income and require proof of stable income for at least 6 to 12 months for borrowers, especially for foreigners.
Percentage increase in new mortgage loans in 2024, a sign of revived purchase appetite.
Demand Segmentation: Smaller, More Modern, Greener
The structure of residential demand is changing rapidly. Rising prices and rates, the growth of single-person households, the rise of remote work, and increased sensitivity to environmental issues have profoundly altered buyers’ criteria.
The new construction market shows a clear dominance of small apartments and townhouses (1 to 3 rooms), especially in well-connected urban neighborhoods. Large multi-family houses are in decline. Larger family apartments remain in demand, but in an optimized form: units of 70 to 90 m² on the immediate periphery, necessarily including an outdoor space (terrace, balcony, or small garden).
Buyers show a marked preference for modern, energy-efficient, and well-equipped buildings. In 2023, over half of the newly delivered apartments already belonged to energy class A+, and the A++ standard is becoming the reference standard from 2025 onward. In this context, energy renovation programs, supported by the state and the European Investment Bank, are gaining ground, notably through the collective building modernization program that subsidizes thermal improvement of the existing stock.
Nearly 60% of workers now practice teleworking at least partially, strongly influencing housing choice. An extra room or a dedicated office nook has become a priority criterion for many buyers and tenants, to the point that commercial plans and real estate agent pitches are adapting to this new demand.
The Sustainable Turn: Labels, Wood, and Green Energy
Alongside purely economic trends, the Lithuanian market is engaged in a profound environmental transformation. Driven by European regulation and ambitious national policies, construction is “greening” at high speed.
Buildings certified to international standards such as BREEAM or LEED are multiplying, first in offices and logistics, then gradually in residential. In Kaunas, the Continental Automotive plant obtained LEED Gold certification, becoming one of the symbols of this new generation of high-performance industrial buildings, while in Vilnius, more and more office and commercial projects aim for sustainability labels to meet the requirements of large international companies.
Lithuania has developed its own certification framework, LBSAS, designed to be more adapted to local specifics and less costly than international standards. This system evaluates buildings on a series of criteria including energy performance, mobility, indoor air quality, material choice, water and waste management, and biodiversity. Currently, the majority of certified buildings are in the capital, Vilnius, but sector professionals anticipate a gradual generalization of these environmental requirements to the entire country’s real estate market.
The other major trend is the return to favor of wood as a construction material, as part of the development of the bioeconomy. Comparative studies have shown that cross-laminated timber structures have a significantly lower carbon footprint than reinforced concrete, consume less energy and water in construction, and generate less waste. For equal surface area, a multi-story wooden structure can thus emit up to three times less CO₂ equivalent than a concrete structure, while storing biogenic carbon during the building’s lifespan.
From November 2024, at least 50% of the materials for new public buildings must be wood or of organic origin. Starting in 2025, these buildings must also follow a recognized environmental certification scheme.
Commercial Real Estate: High Selectivity, Dominance of Retail and Logistics
On the office, retail, and warehouse side, the landscape is more contrasted. 2024 was one of the weakest in a decade for commercial real estate investment in Lithuania, with a volume of about €230 million, a drop of over 40% compared to previous years. Large transactions, above €30 million, have almost disappeared in favor of small to medium-sized deals, largely dominated by local capital.
In 2024, nearly 60% of commercial investments were concentrated on retail parks and medium-sized supermarkets occupied by major food chains.
Offices, meanwhile, are going through a phase of supply digestion. In Vilnius, the stock of modern offices is around 1.2 million m², with 41% in category A. 2024 saw the delivery of only an additional 24,700 m²—the lowest flow in ten years—but demand also weakened sharply, with just over 52,000 m² leased during the year, 58% less than in 2023. Remote work, space optimization, and economic uncertainties are pushing many occupants to seek shorter leases and to share or sublet part of their space.
The vacancy rate in the capital’s modern offices has climbed to nearly 9%.
Warehouses and logistics facilities are the other big winner in this restructuring. In Vilnius and its region, over 120,000 m² of modern warehouses were added in 2024, bringing the total to nearly 1 million m², and about 100,000 m² more are expected in 2025. While the vacancy rate is starting to rise, especially in older platforms, demand for modern, energy-efficient spaces, well-connected to major highways and capable of accommodating automation solutions, remains very solid.
Land Market: Volumes Down, but Prices Stable Around Vilnius
The land market follows its own logic. After a transaction peak in 2021, volumes contracted for two consecutive years, by 14% in 2023 and another 2% in 2024, bringing activity back to levels close to those of 2016. The share of agricultural land in sales is gradually decreasing, while parcels for residential or mixed-use are gaining importance, especially around Vilnius.
Price per m² in euros for parcels for collective buildings in the capital’s residential suburbs.
For foreign investors, however, access to land involves more constraints than buying homes. The acquisition of agricultural or forest land requires specific authorizations, and some strategic land—protected natural areas, sites near sensitive infrastructure—is strictly regulated, especially since the tightening of rules toward Russian investors.
A Stable Regulatory Framework and Openness to Foreign Capital
On the legal front, Lithuania offers a relatively transparent and predictable environment. Foreigners—apart from specific categories like Russian citizens without local residency—can freely buy residential and commercial properties, rent them, and resell them. Citizens of the EU and EEA enjoy the same rights as Lithuanians.
There is no ‘golden passport’ program linked to real estate investment, but residence permits or relocation facilities can be used to attract talent and investors. The tax regime is competitive: the 21% VAT generally applies to new builds (included in listed prices). Rental income and capital gains are subject to income tax, with a standard rate of 15%, which can reach 20% above certain high thresholds.
Property taxes on primary residences remain moderate, even nil below certain value levels, while investment or luxury properties are more heavily taxed. The combination of this tax framework and still-high rental yields partly explains the growing success of real estate investment structures, including local funds and REITs supervised by the Bank of Lithuania.
Outlook: Slower, Greener, and More Selective Growth
In the medium term, all indicators converge toward a scenario of continued price increases, but at a more measured pace than over the past decade. Most observers anticipate annual increases on the order of 5 to 7% for the 2025‑2026 period, with possible significant variations depending on segments and locations.
The most dynamic markets are expected to remain:
Overview of the main real estate trends and challenges in Lithuanian cities, from the capital to catch-up cities.
Driven by the technology and services sectors, the influx of expatriates and students generates strong demand, facing the challenge of producing enough housing, particularly rentals.
These cities benefit from proactive policies to attract industrial and logistics companies, with a risk of temporary oversupply in certain market segments.
These mid-sized cities, still affordable, are now experiencing faster real estate growth than the capital, marking a catch-up phase.
At the same time, many rural areas and small towns could see demand stagnate or decline, with a trend toward stabilization, or even a decrease, in rents and yields.
To stand out, developers must prioritize energy performance (through renovation and low-carbon materials like wood), quality of life (integration of green spaces, biophilia, acoustic comfort), as well as space flexibility and accessibility to transport and services.
Finally, the rise of remote work, coliving, professionally managed rentals, and short-term rental platforms, especially on the coast, will continue to blur traditional boundaries between primary residence, long-term rental, and tourist accommodation.
In this shifting yet promising context, real estate in Lithuania appears as a market that has reached maturity, entered a phase of slower but more qualitative growth, with solid macroeconomic fundamentals, still attractive yields, and a stable regulatory framework. A configuration that, despite geopolitical uncertainties and interest rate cycles, still makes it one of the most closely watched markets in the Baltic region today.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
