Published on and written by Cyril Jarnias
Long considered a peripheral market in Europe, Lithuania has now established itself as one of the most dynamic playgrounds for real estate investors. Solid economic growth around 2.5–3% per year, steady wage increases, an influx of expatriates, booming technology and logistics sectors, rapidly developing tourism: the cocktail is favorable, and it’s directly reflected in the real estate numbers.
Residential prices in Lithuania have surged by 187% since 2015.
Between the historic districts of Vilnius, the rapidly transforming centers of Kaunas, the port areas of Klaipėda, and the high-yield markets of Šiauliai or Panevėžys, every city and district tells a different investment story. The challenge is understanding which neighborhood best fits your strategy: immediate yield, long-term appreciation, short-term rental, student coliving, or a combination of several approaches.
Quick Overview of the Lithuanian Market
The Lithuanian real estate market rests on solid fundamentals. The economy grew by 2.7% in 2024, and various forecasts converge on annual growth between 2.4% and 3% through 2027. Wages are rising faster than real estate prices: +10.4% in 2024 for gross salaries, compared to about 3–6% for prices per square meter depending on the city. The result: affordability is improving, which supports both purchase and rental demand.
The average national gross rental yield is about 6.3%. It varies by city: between 4.9% and 6% in Vilnius, 5.8% in Kaunas, 6.2% in Klaipėda. Secondary markets like Šiauliai and Panevėžys offer higher yields, from 7% to 9%, especially for small apartments.
The country has also invested heavily in its infrastructure: highways, modernization of national roads, bridges and viaducts, the Rail Baltica project which will connect the Baltic states to the European rail network, airport expansions. These projects are gradually reshaping the appeal of suburbs, logistics zones, and transportation hubs, which directly benefits certain residential and mixed-use neighborhoods.
For foreign investors, acquiring real estate (apartments, houses, offices) is flexible, with no land area quotas or minimum price, except for agricultural land and forests. Taxation is straightforward: 15% tax on rental income (excluding cases considered a business activity) and moderate property taxation, with an exemption up to €150,000 in net value for a primary residence (€220,000 for large families).
In this context, several cities stand out as major hubs: Vilnius, Kaunas, and Klaipėda in the lead, followed by Šiauliai, Panevėžys, and certain tourist coastal areas.
Vilnius: A Closer Look at the Most Promising Neighborhoods
As the political and economic capital of the country, Vilnius alone accounts for nearly three-quarters of foreign direct investment. The technology and services sector is particularly dynamic, with over 265 fintech companies and a continuous influx of expatriates, international students, and workers from Ukraine, Belarus, or Russia. The population has crossed the threshold of 600,000 inhabitants, with an increase of nearly 3% in 2023 alone.
In terms of residential property, the average price of an apartment reaches about €2,680/m² (March 2025), with an annual growth rate around 3.3–5.8% depending on sources and segments (new vs. old). Gross yields generally range between 5% and 6%, with peaks of 7–8% for certain studios or in well-targeted emerging neighborhoods.
Senamiestis (Old Town): Prestige, Tourism, and Appreciation
The historic center of Vilnius, a UNESCO World Heritage site, corresponds to the Senamiestis district. It’s a dense Baroque setting, home to the cathedral, Gediminas Castle Tower, the Hill of Three Crosses, St. Anne’s and Archangel churches, iconic cobblestone streets like Pilies, Vokiečių, Bernardinų or Literatai, and hidden inner courtyards housing cafes, restaurants, and boutiques.
For the investor, Senamiestis offers several property profiles. You can find apartments in buildings from the 16th to the 19th century, often renovated, with wooden beams, exposed brick, vaults, or fragments of frescoes. At the other extreme, small new developments or high-end reconstructions offer contemporary amenities: elevator, underground parking, terraces, panoramic roof views, private saunas, fireplaces.
Prices are naturally high: on the primary market, some projects show average prices around €3,318/m², and prestige developments far exceed this level. Penthouses in the Old Town can be listed at €1.5 million. The trade-off is very strong rental demand, especially for short-term rentals and medium-term stays for expatriates, visiting executives, or affluent students. The neighborhood also concentrates many hotels and seasonal rentals: over 3,080 vacation rentals listed in Vilnius, a large portion in close proximity to the center.
Average gross yields in Senamiestis remain below more affordable neighborhoods, around 4.1% for long-term rentals, and about 3.6–4.6% depending on the property type. However, capital appreciation is among the strongest in the country. The city center directly benefits from public investment in public spaces, monument maintenance, cultural activities, and tourism, with nearly 1.2 million visitors welcomed in 2023.
For an international investor seeking a “calling card” asset in the capital, the old center of Vilnius is thus a coherent choice: low vacancy, excellent image, high resale liquidity, but a lower current yield than other more “functional” districts.
Užupis: The Bohemian Neighborhood Turned Safe Bet
Just on the other side of the Vilnia River, the Užupis district has forged a unique reputation: a former bohemian wasteland, it declared itself a “Republic” with its quirky constitution posted in the street, its artists’ workshops, its Užupis Angel statue in the main square, its little bronze mermaid by the river, and its “mermaid” statue that has become a landmark for strollers.
Formerly an alternative artists’ quarter, Užupis has become considerably gentrified with the renovation of its alleys and facades and the arrival of design cafes. Its proximity to the historic center, its brand image, and its residual artistic ambiance now attract a varied international clientele: creatives, freelancers, foreign students, and tourists.
From an investment standpoint, Užupis is close to Senamiestis in terms of prices, but often with a slight discount and a younger tenant profile. Gross yield can be slightly higher than in the Old Town, especially for small units well-optimized for roommate situations, coliving, or furnished short-term rentals. However, the housing supply remains limited, which naturally supports rents.
The medium-term interest also lies in the progressive upscaling of the neighborhood: as renovations progress and available land becomes scarcer, values are expected to continue tightening, following the logic of “completed gentrification” where the artistic neighborhood image combines with a higher income level among residents.
Šnipiškės: New Business Center and Strong Growth Potential
On the other side of the Neris River, north of the historic center, Šnipiškės embodies the contemporary transformation of Vilnius. The district now hosts the capital’s main business district: glass buildings, office towers, headquarters of banks and fintech companies, mixed-use developments combining offices, retail, hotels, and housing. Major arteries like Konstitucijos Avenue or Kalvarijų Street structure this rapidly changing sector.
This district is sometimes presented as the “New Center” or the financial center of Vilnius. You find modern apartments in high-rise buildings, sometimes up to the 24th floor, with panoramic views of the river and the old town, underground parking, gyms, shared terraces. This type of product clearly targets tertiary sector executives, expatriates on assignment, and investors looking for recent, easy-to-manage properties.
Yield figures show interesting potential. Overall, studios in this neighborhood can offer yields approaching 8% in certain targeted projects, although the observed average is more around 4.8–5% across all property types. Rents benefit from immediate proximity to office buildings, excellent transport connections, and strong demand from young professionals wanting to live within walking distance of their workplace.
Šnipiškės is also a contrasting neighborhood: just a few streets away from the towers, you can still find old wooden houses, an urban fabric nicknamed “Shanghai” for its somewhat chaotic and informal character. This aspect suggests opportunities for repositioning in the medium term, as new developments push the boundaries of the business district further.
For an investor seeking a compromise between yield and appreciation potential, Šnipiškės stands out as one of the best candidates in the capital.
Naujamiestis: The New Urban Centrality
Southwest of the old town, Naujamiestis (“New Town”) covers a large area blending old industrial buildings, residential blocks from the Soviet era, and contemporary projects. The neighborhood has clearly awakened in recent years, driven by the opening of the MO Museum of Modern Art, brownfield renovations, and the establishment of cafes, coworking spaces, and cultural venues.
Studios in Naujamiestis offer gross yields exceeding 6%.
Naujamiestis attracts a varied clientele: students from nearby universities, young professionals who favor the neighborhood’s bars and nightlife, creatives drawn to the “post-industrial” vibe of certain blocks. Walkability or bus access to the old town and business district further strengthens the area’s appeal.
In the medium term, the continuation of brownfield conversions, the arrival of new mid to high-end residential projects, and the densification of services (shops, schools, cultural facilities) should support the rise in prices per square meter, while maintaining decent rental yields.
Fabijoniškės, Pašilaičiai, Pilaitė, Bajorai: Betting on Peripheral Neighborhoods
Beyond the central neighborhoods, the outskirts of Vilnius host several districts that play a key role for yield-focused strategies and mass residential demand. Fabijoniškės, Pašilaičiai, Pilaitė, Bajorai, Justiniškės, or Lazdynėliai are areas where you find new or recent developments at significantly more affordable prices, but with strong rental demand.
Yield analysis shows that Viršuliškės and Bajorai even stand out at the top, with returns above 6% on average. A project like “Bajoru lajos” illustrates this positioning: a furnished 27 m² studio offers an estimated yield of 7%, with an annual rental income around €6,600, while a 33 m² two-room apartment shows about 6% yield for an annual rent of €7,800.
In these areas, the clientele mainly consists of young households, middle-income families, and long-term tenants, often salaried workers in the tertiary sector or industry who prioritize modern housing that’s less costly than in the center. The rise of remote work also increases the appeal of slightly larger apartments, with a balcony or small terrace, near green spaces and daycare centers.
The table below summarizes the average yields observed in different residential neighborhoods of Vilnius:
| Neighborhood / District | Estimated Average Rental Yield |
|---|---|
| Viršuliškės / Bajorai | > 6 % |
| Justiniškės | 5.69 % |
| Lazdynėliai | 5.54 % |
| Pilaitė | 5.23 % |
| Žirmūnai | 5.23 % |
| Pašilaičiai | 5.21 % |
| Senamiestis (Old Town) | 4.13 % |
| Žvėrynas | 4.06 % |
| Naujamiestis (studios) | ≈ 6.21 % |
| Šnipiškės (targeted studios) | up to ≈ 8 % |
Pilaitė deserves a special mention. This western district has seen its population more than double between 2001 and 2021 (+101%), driven by a continuous flow of new residents attracted by an attractive price-quality ratio. Prices for older apartments there have climbed 40–45% in five years, without yet reaching center-city levels. For an investor seeking medium-term capital gains while maintaining acceptable yields, this type of district constitutes an interesting alternative.
Žvėrynas, Antakalnis, Paupys, Verkiai: Greenery, Upscale, and Family Demand
Other neighborhoods combine a strong residential character, lots of greenery, and steadily rising real estate values. This is the case for Žvėrynas, Antakalnis, Paupys, or Verkiai.
Žvėrynas is an upscale neighborhood of Vilnius, located on the edge of the Neris River. It is characterized by its tree-lined streets, historic wooden houses, and recent upscale apartment buildings. Considered one of the most expensive sectors of the Lithuanian capital, it offers relatively low rental yields (about 4% on average) but benefits from excellent price stability. Real estate projects like “Žvėryno Lapės” offer prices around €2,900/m², mainly targeting affluent family clientele and expatriates seeking tranquility in immediate proximity to the city center.
Antakalnis, to the northeast, focuses on its green spaces, proximity to the river, and historic parks like the Radvilų garden. It’s an area favored by families and diplomats, where long-term rental demand is robust, even if strictly “investor-grade” products are less common.
Paupys, close to the old town along the Vilnia River, has literally changed its face with major redevelopment projects. Old factories, including the Skaiteks plant, are being converted into contemporary residences, and nearly 800 new rental apartments have recently emerged there. The neighborhood attracts mainly young professionals and couples, sensitive to the proximity to the center and the careful architecture of new complexes. Values there have risen sharply, confirming the potential of well-converted post-industrial neighborhoods.
Finally, Verkiai, to the north, benefits from very marked natural landscapes, wooded areas, and pleasant views. This sector is gaining popularity among households wanting to combine a green setting with decent access to the center, which translates into new, rather high-end residential developments.
Investing in Student Rentals and Coliving in Vilnius
Vilnius is also the country’s main university hub, with a concentration of institutions like Vilnius University, Vilnius Gediminas Technical University, ISM, Mykolas Romeris University, art schools, and international private institutions. A student’s typical monthly expenditure ranges between €300 and €900, of which €90–300 is for housing depending on the type of accommodation.
Traditional university dormitories remain the most affordable option, around €90–150 per month, but they are no longer sufficient to absorb demand. Private solutions are multiplying: coliving, design student residences like SHED Coliving or Solo Society, furnished studios, or roommate situations in standard apartments. Rents in this segment are typically between €299 and over €400 for a room, even €500–700 for a private studio in the city center.
The city suffers from a deficit of quality student housing: in some comparable Baltic capitals, only 2–10% of students have access to a standard European private residence, leaving significant space for specialized operators. Funds like the “IAM CEE Student Housing Fund” are precisely betting on this niche, aiming to finance thousands of rooms in Central Europe and the Baltic states, including Vilnius.
For an individual investor, neighborhoods close to campuses (Saulėtekis, Olandų, Didlaukio, Santaros) or well-connected by transport offer an interesting profile: small units easy to rent, limited vacancy, high turnover allowing regular rent adjustments. The main risk lies in the evolution of regulations on short-term rentals and the progressive competition from large institutional operators.
Kaunas: City Center and Neighborhoods in Full Renaissance
As the country’s second-largest city, Kaunas offers a very different face from Vilnius, but just as interesting. Located at the confluence of the Nemunas and Neris rivers, the city has long played a major industrial and logistics role. It has recently reinvented itself as a technological and academic hub, with over 150 international tech companies established and nearly 40,000 students, many of whom are from abroad.
In terms of prices, Kaunas remains significantly more affordable than Vilnius: around €1,846/m² on average (March 2025), about 30% less than the capital. Yet, price momentum is often stronger: +4.1% to +5.6% per year in recent periods, even +12.1% over the 12 months ending October 2025. Rental yields hover around 6–8%, higher than those in Vilnius.
The City Center: Between Modernist Heritage and New Residences
The heart of Kaunas, around Laisvės alėja (Liberty Avenue), the old town, and the riverbanks, is experiencing a true renaissance. Large modernist buildings, disused industrial brownfields, and old private houses are gradually being converted into offices, housing, student residences, or mixed-use complexes.
Investors target the city center for its rapid modernization. The housing supply is moving upscale with many new projects, emphasizing careful architecture, greening of interior courtyards, and local services, in line with the ’15-minute city’ concept. This dynamic offers a modernized real estate portfolio at prices well below those of Vilnius.
Rental yields in central Kaunas reflect this combination of attractiveness and contained prices. Studios and small units can show over 7% gross yield, while 2–3 room apartments are around 5.2–5.9%. Demand is driven by students (KTU, Vytautas Magnus University, medical universities, etc.), young tech professionals, and employees of international groups who have moved to the area.
Among Kaunas’s most interesting neighborhoods, Dainava holds a special place. Located near several higher education institutions and major roads, this area concentrates housing mostly from the Soviet era, but well-served and increasingly modernized. Purchase prices remain very affordable relative to the achievable rents, especially for small or medium-sized apartments.
For student rentals or roommate situations, prioritize districts close to campuses or well-served by transport. Coliving is booming in Lithuania and developing in Kaunas, although the offer is less structured than in Vilnius.
Beyond that, the city is seeing new hubs emerge like the Nemunaičiai project, a vast 6-hectare mixed-use riverside neighborhood, where 70–80 m² 2–3 room apartments with river views sell very well, as do smaller two-room units (up to 40 m²) oriented towards courtyards. This combination of family housing and small “investor” units illustrates the strategy of many developers, who aim to attract both owner-occupiers and investors.
Kaunas, a Strategic Alternative in a Lithuanian Portfolio
Compared to Vilnius, Kaunas presents a double advantage: significantly lower entry cost and higher yields. More and more foreign investors are taking an interest, attracted by yields that often exceed 6–8% gross on residential, and the prospect of long-term revaluation as the city continues its repositioning.
Recommendations for a diversified portfolio focused on Lithuania’s two main cities, combining liquidity, yield, and growth potential.
The capital offers market depth and strong appreciation potential, ideal for portfolio stability and liquidity.
The second city presents attractive yield opportunities and still-underutilized growth, perfect for diversification.
The central districts of Vilnius and the Dainava district in Kaunas are privileged entry points for long-term rentals.
Areas around universities in both cities are optimal for investments oriented towards coliving.
Klaipėda: Betting on the Port and Coastal Tourism
The country’s third-largest city, Klaipėda is best known for its port, Lithuania’s only seaport, and its role in regional logistics. It is the largest ice-free port in the Eastern Baltic, handling over 47 million tons of cargo annually, more than 1 million TEU (containers), and regular maritime connections to Germany, Sweden, as well as to American and South American coasts via other hubs.
This economic base is reflected in real estate. The average apartment price in Klaipėda is around €1,752/m² (March 2025), with annual growth of about 5.4–7.6%. Gross rental yields, meanwhile, hover around 6.2%, with studios approaching 6.7%. For an investor seeking a compromise between yield and tourism potential, the Klaipėda market is particularly attractive.
Coastal Neighborhoods and Transforming City Center
Klaipėda’s strength lies in its dual face: an industrial port city and the gateway to Baltic coast resorts, notably Palanga and the Curonian Spit. Neighborhoods close to the sea and the historic center are naturally the most sought-after for seasonal rentals, with growing demand for short-term accommodations.
The city center is undergoing major transformation with port brownfield redevelopment projects, like Mėmelio Miestas, creating new mixed-use urban blocks (housing, offices, retail, public spaces). This dynamic offers purchase opportunities in new developments and appreciation potential for well-located older buildings.
For long-term rentals, the presence of industries, shipyards, the logistics hub, and the Klaipėda Free Economic Zone (FEZ) guarantees a stable base of rental demand. Over 1,500 transport and logistics companies are estimated to be based in the region, translating into a broad workforce, often seeking housing near transportation arteries or the port.
Klaipėda as a Base for Combined Strategies
An investor can approach Klaipėda in two ways: either targeting properties for long-term rental to port, petrochemical, logistics, or local IT employees, with stable yields around 6–7%; or orienting their strategy towards properties near the sea or historic center suitable for seasonal rentals, with marked seasonality but higher nightly revenues.
The development of tourism, supported by the tourist tax and investments, favors seasonal rentals. To succeed, it is crucial to choose the neighborhood, street, and property type wisely, and to know the local regulations on furnished short-term rentals.
Šiauliai, Panevėžys, and Secondary Cities: Hunting for High Yields
Beyond the trio Vilnius–Kaunas–Klaipėda, several secondary cities offer a very interesting profile for investors focused on yield rather than appreciation.
Šiauliai, for example, shows average prices around €1,172/m² (March 2025), with annual growth of about 6.4–7.2%. Gross rental yields there are among the highest in the country, at 8.22% on average, with studios exceeding 9%. Panevėžys follows a comparable trajectory, with average prices at €1,149–1,192/m², annual growth close to 6.7–8.1%, and gross yields ranging between 7% and 9% depending on the project.
These cities don’t offer the same liquidity or resale potential as Vilnius or Kaunas, but they can play an interesting role in a diversification strategy: acquisition of small, low-priced apartments, light rehabilitation, long-term rental at competitive rents, collection of significant rental cash flow relative to the capital invested.
However, the investor must consider several specificities: narrower markets, greater sensitivity to local economic cycles, sometimes significant dependence on a few large employers and targeted industrial sectors. In this context, neighborhood choice must be even more selective, prioritizing central areas, close to amenities and transportation arteries.
Palanga and the Coastline: Focus on Short-Term Rentals
On the coast, the seaside resort of Palanga represents a special case. For a two-room apartment, calculations show annual gross yields of around 3.8% for long-term rental, but which can climb to over 10% for seasonal rental. With an average price around $186,000 for this type of property, estimated annual rental income reaches about €7,030 for long-term and over €20,000 for short-term.
Rental demand in Palanga is extremely seasonal, concentrated in the summer, but the potential is high thanks to the appeal of the beaches and proximity to Klaipėda. For a tourist rental investor, neighborhoods near the sea, the center, and main arteries offer opportunities, provided the operational constraints of this model are managed.
How to Build a Neighborhood-by-Neighborhood Strategy in Lithuania?
Faced with the diversity of Lithuanian cities and neighborhoods, the first step is to clarify your priorities: seeking high yield, capital appreciation, a mixed profile, exposure to a certain economic sector (tech, logistics, tourism, universities), or the possibility of using the property a few weeks a year.
From there, a simple framework can be established:
Guide to the best opportunities based on your objectives: appreciation, yield, or seasonal rental.
Target the central neighborhoods of Vilnius (Old Town, Užupis, Šnipiškės, Naujamiestis) and the center of Kaunas for long-term investment.
Prioritize well-served peripheral neighborhoods of Vilnius (Pilaitė, Fabijoniškės, Bajorai, Pašilaičiai), university and central areas of Kaunas, and mixed sectors of Klaipėda.
Focus on cities like Šiauliai or Panevėžys, or on studios in emerging neighborhoods of Vilnius and Kaunas.
Concentrate your search on the historic center of Vilnius, Užupis, certain sectors of Klaipėda, and the seaside resort of Palanga.
The following table summarizes some ballpark figures for the main cities:
| City | Average Price €/m² (approx.) | Recent Annual Growth | Average Gross Yield | Dominant Profile |
|---|---|---|---|---|
| Vilnius | 2,680–2,768 | ≈ 3.3–5.8 % | 4.9–6.0 % | Growth + liquidity |
| Kaunas | 1,846–1,926 | ≈ 4.1–8.4 % | 5.8 % (6–8 % in practice) | Yield + growth |
| Klaipėda | 1,752–1,816 | ≈ 5.4–7.6 % | ≈ 6.2 % | Port + tourism |
| Šiauliai | 1,172–1,212 | ≈ 6.4–7.2 % | ≈ 8.2 % | High yield |
| Panevėžys | 1,149–1,192 | ≈ 6.7–8.1 % | 7–9 % | High yield |
These figures naturally need to be refined neighborhood by neighborhood, but they provide an initial snapshot of the hierarchy among markets.
Conclusion: Neighborhoods to Select with Precision
Lithuania is no longer just a small emerging market on the fringes of Europe. It is now a country with a clear trajectory: economic growth, upscaling of its metropolitan areas, massive investments in infrastructure and green energy, dynamism in the technology and services sector, growing attractiveness for expatriates and international students.
Overview of the main geographic sectors offering distinct real estate investment opportunities, based on their yield profile and strategy.
Ideal combination for tourism and prestige investments, leveraging historical and artistic heritage.
Vilnius’s new tertiary centrality, attracting businesses and professionals.
Well-served peripheries of Vilnius, favored for rental yield.
Offers an excellent price-quality ratio for investment.
Investment strategies linked to port activities and seaside tourism.
Provincial cities targeted by hunters of high rental yields.
The challenge for the investor is to not limit themselves to a “by city” reading, but to finely enter into the geography of neighborhoods, streets, and projects. This is where the performance of an investment in Lithuania is truly determined: in the ability to identify, within a favorable national market, the micro-locations and property types that will make the difference in terms of yield, rental vacancy, resale, and resilience against economic cycles.
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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.
