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What will happen in Vilnius’s real estate market? Will prices go up or down? Is Vilnius still a hotspot for foreign investors? How is Lithuania’s government impacting real estate policies and taxes in 2025?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with notaries, real estate agents, and clients who buy properties in Vilnius, we’ve gained firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
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1) Rental yields will rise slightly as more young professionals enter the market
In recent years, Vilnius has seen a steady increase in its population, with a growth rate of 0.04% annually as of 2024. This growth is largely due to the influx of young professionals attracted by job opportunities and a vibrant lifestyle. As more people move to the city, the demand for rental properties naturally increases.
The trend of young professionals moving to urban areas has been reshaping the real estate market. By 2023, a significant portion of Lithuanians, about 68.4%, were living in cities and towns. This urban migration has made city properties, especially rentals, highly sought after. As a result, rental prices in Vilnius surged by 26.7% in 2022 and 9.5% in 2021, reflecting the strong demand for rental homes.
Moreover, Vilnius's economic growth has attracted more businesses and professionals, including expatriates. By late 2023, the number of expatriates in the city had increased significantly, further pushing up the demand for rentals. This demand is particularly strong in central business districts, where many young professionals prefer to live.
Additionally, young professionals often prefer renting over buying, which keeps the rental market tight. This preference, combined with urbanization and lifestyle changes, has led to increased demand for rental properties. Municipal reports also show demographic shifts, such as the rising number of inhabitants from Ukraine and Belarus, contributing to the growing rental demand.
Sources: World Population Review, Global Property Guide, Wikipedia
2) Vilnius rents will increase as more people relocate for jobs
Rents in Vilnius are on the rise as more people flock to the city for job opportunities.
Vilnius is buzzing with activity, thanks to an influx of international businesses, especially in the tech sector. These companies are setting up shop in the city, creating a wealth of job opportunities and drawing in professionals who want to live close to work. The demand for housing is particularly high in prime areas like the Old Town, where new developments are scarce.
The city's population is booming, with an estimated 541,505 residents in 2024. This surge in numbers is a clear sign of the growing demand for housing. As more people move to Vilnius, the need for rental properties continues to climb.
Adding to the mix is the vibrant expatriate community, which reached 73,000 by late 2023. Many of these young professionals prefer urban living, especially in the lively city center where housing options are limited. This preference further fuels the demand for rentals.
The rental market in Vilnius is already showing its strength. In 2022, rental prices surged by 26.7%, followed by another 10.2% increase in 2023. These numbers highlight the growing pressure on the housing market as more people seek homes in the city.
With the city's appeal and job opportunities on the rise, it's no wonder that Vilnius is becoming a hotspot for those looking to relocate. The combination of a thriving job market and a limited housing supply is setting the stage for continued growth in rental prices.
Sources: World Population Review, Global Property Guide
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Lithuania. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
3) Foreign investment in Vilnius real estate will grow because of favorable tax policies
Vilnius is quickly becoming a prime destination for foreign real estate investors thanks to its favorable tax policies.
In 2023 and 2024, Lithuania introduced a 15% income tax rate on rental income, which is quite appealing compared to other European countries. This makes it easier for foreign investors to see a good return on their investments. Plus, non-residents can buy property in Vilnius without any restrictions, cutting through the red tape that often complicates purchases in other countries.
Local real estate agencies have noticed a rise in inquiries and transactions from foreign buyers, thanks to this ease of access. The Lithuanian government sweetens the deal further by offering residency permits for those investing in urban real estate, making it even more attractive for international investors.
Vilnius stands out in Europe as a top choice for real estate investment, with studies highlighting its competitive property tax rates and high rental yields. This combination draws international buyers to the city, attracted by its strategic location and vibrant business environment.
Investors are particularly interested in Vilnius because of its strategic location and dynamic business scene. The city offers a unique blend of modern amenities and historical charm, making it a desirable place to live and invest.
With these favorable conditions, Vilnius is poised to see a significant rise in foreign investment in its residential real estate market. The city's appeal is only expected to grow as more investors recognize the benefits of its tax policies and investment opportunities.
Sources: Euronews, Euronews, Immigrant Invest
4) Vilnius property prices will rise gradually due to increased foreign investment
Vilnius is becoming a hotspot for foreign investors, especially in the real estate market.
In recent years, the city has seen a surge in foreign direct investment, with Lithuania's FDI reaching EUR 29.9 billion by the end of 2022. This growth is largely fueled by investors from Germany, Estonia, and Sweden, who are drawn to Vilnius's thriving tech sector. As a result, the demand for both rentals and housing is on the rise, making it an attractive market for potential buyers.
The Capital Region, which includes Vilnius, is at the center of this investment boom. The influx of international businesses has turned the city into a vibrant hub, attracting professionals from around the world. This has led to a significant increase in the number of foreigners living in Vilnius, with 73,000 residing there by late 2023, up from 38,000 just a year and a half earlier.
These newcomers are not just here for work; they are drawn by the city's lively atmosphere and opportunities. This growing expatriate community is driving up the demand for residential properties, as more people look to settle in Vilnius. The city's appeal is not just limited to its economic prospects but also its quality of life, which is a major draw for those looking to relocate.
For those considering buying property in Vilnius, it's important to note that the market is expected to see a gradual increase in prices. This trend is largely driven by the steady flow of foreign investment and the city's growing reputation as a business and cultural center. As more international companies set up shop in Vilnius, the demand for housing is likely to continue its upward trajectory.
Investing in Vilnius real estate now could be a smart move, as the city's market is poised for growth. With its combination of economic opportunities and a vibrant lifestyle, Vilnius is becoming an increasingly attractive destination for both investors and new residents alike.
Sources: Statistical Office of Lithuania, Wikipedia, Trading Economics, International House Vilnius
5) More foreign investors will focus on Vilnius because of its strategic Baltic location
Vilnius has become an increasingly attractive destination for foreign investors, largely due to its strategic location in the Baltics. In recent years, the city has seen a significant rise in property prices, which is a clear indicator of its growing appeal. This trend is supported by the influx of tourists, with Vilnius receiving almost 1.2 million tourists in 2023, marking a 12% increase from the previous year. Such a boost in tourism contributes to higher property values and demand for real estate, making Vilnius an enticing investment opportunity.
Moreover, Lithuania has experienced a substantial increase in foreign direct investment (FDI), with Vilnius attracting a significant portion of this investment. By the end of 2022, the cumulative FDI in Lithuania totaled EUR 29.9 billion, with Vilnius drawing 73.6% of this amount. This influx of investment is driven by contributions from countries like Germany, Estonia, and Sweden, highlighting Vilnius's strategic importance in the region.
Additionally, Vilnius is becoming a hub for international companies, thanks to its favorable business environment and strategic location. The city's growing tech and startup scene further enhances its appeal, attracting foreign investors interested in the tech sector. The Lithuanian government has also implemented various incentives to attract foreign property investors, such as tax breaks and streamlined bureaucratic processes, making Vilnius an even more attractive investment destination.
Sources: Stat.gov.lt, Made in Vilnius, World Construction Network
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6) Demand for modern urban housing in Vilnius will rise as more young professionals move in
Vilnius is quickly becoming a magnet for young professionals due to its booming job market and vibrant lifestyle.
The city is experiencing a surge in employment opportunities, particularly in tech and startups, making it a digital hotspot. With around 740 startups and a tech workforce that's expected to double soon, Vilnius is on the rise as a tech hub.
Universities in Vilnius are drawing in more students, both local and international, who see the city as a place to kickstart their careers. This influx of students suggests a future workforce likely to stay and boost the local economy.
The government is sweetening the deal by offering relocation grants and tax incentives to attract skilled professionals. These perks make Vilnius an appealing choice for young talent eager to advance their careers.
There's a noticeable uptick in apartment sales in 2023, indicating a growing demand for modern, urban housing. This trend shows that millennials and Gen Z are increasingly drawn to Vilnius for its dynamic city life and career opportunities.
As more young professionals flock to Vilnius, the city is poised to see a significant increase in demand for contemporary urban living spaces.
Sources: Go Vilnius, Tech Behemoths, Global Finance, Registrų Centras
7) Rental yields will drop as more investors enter the market, boosting competition
In recent years, Vilnius has experienced a notable increase in property prices. Back in 2023, the apartment price index in Vilnius rose by 9.08%. This rise in property prices means that investors are paying more to purchase properties, which can lead to lower rental yields because the cost of buying is higher compared to the rental income they can generate.
The number of property transactions in Vilnius has also been on the rise. For instance, in October 2024, there were 386 new apartments and terraced houses agreed for sale, which is a significant increase compared to previous years. This uptick in transactions indicates that more investors are entering the market, which can increase competition among landlords trying to rent out their properties.
Additionally, there has been a growing interest from foreign investors. In 2022, a substantial portion of foreign direct investment in the Capital Region flowed into Vilnius. This influx of international investors adds to the competition in the rental market, as more people are looking to buy properties and rent them out, potentially driving down rental yields.
Moreover, the average gross rental yield in Lithuania has been decreasing. In Q2 of 2024, the average gross rental yield was 6.44%, down from 6.77% in Q3 of 2023. This decline suggests that the market is becoming more competitive, with more investors vying for tenants, which can lead to lower rental yields.
Sources: Global Property Guide, Lrytas
8) Rental yields in Vilnius will stay steady as supply and demand balance out
Rental yields in Vilnius are expected to stay steady as the city finds its sweet spot between supply and demand.
Vilnius is buzzing with activity, and it's not just the locals. Significant population growth is driving up rental demand, as more people flock to the city. This influx keeps the rental market from tipping over, ensuring stability.
Big names like Moody’s, AmerisourceBergen, and McKesson have set up shop in Vilnius, and that's a big deal. These Fortune 500 companies have boosted employment rates, making it easier for people to afford renting. This economic boost is a key factor in keeping the rental market balanced.
Looking back, Vilnius has shown a knack for keeping things steady. Rental yields have been relatively stable over the years. For example, the average gross rental yield only saw a slight dip from 6.77% in Q3, 2023 to 6.44% in Q2, 2024. This kind of consistency is a good sign that the market is in sync.
With more people moving in and jobs on the rise, the demand for rental properties is naturally increasing. This helps maintain a stable market where supply and demand are in balance.
So, if you're thinking about investing in Vilnius, know that the city's rental market is holding its ground, thanks to a mix of population growth and economic stability.
Sources: Global Property Guide, BNP Paribas Real Estate
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Lithuania versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
9) Rental yields in Vilnius will rise as rental demand exceeds supply
Rental yields in Vilnius are on the rise as the demand for rental properties continues to outstrip supply.
Vilnius is buzzing with a growing population, now estimated at 541,505 residents in 2024, which is pushing up the need for housing. This steady population increase is putting pressure on the housing market, making it a hot spot for potential property investors.
Adding to the demand are international students and young professionals flocking to the city. From 2021 to 2023, international student enrollment in Lithuania jumped by 20%, with many choosing Vilnius for its vibrant lifestyle and career opportunities. This influx is creating a lively rental market, especially appealing to those looking to invest in rental properties.
On the flip side, there's a noticeable shortage of rental properties, particularly in the central business districts where space is tight. This scarcity is a boon for landlords, allowing them to charge higher rents and thus boosting rental yields. The limited availability of space in these prime areas makes properties even more desirable.
Looking at the numbers, apartment rents in Vilnius saw a significant rise of 26.7% in 2022, and this trend hasn't slowed down. The consistent increase in rental prices is a clear indicator of the strong demand and limited supply, making it a promising market for investors.
For those considering investing in Vilnius, the combination of a growing population, an influx of students and professionals, and a tight rental market presents a compelling opportunity. The city's dynamic environment and rising rental yields make it an attractive option for property buyers.
Sources: World Population Review, LRT, Global Property Guide
10) Vilnius property prices will stay steady as the market adapts to shifting demand
The property market in Vilnius is showing signs of stability as it adapts to new demand patterns.
By October 2024, the number of new housing units sold in Vilnius had jumped to 282 transactions per month, a 25% increase from the previous year. This uptick suggests the market is bouncing back, even after a slight dip in 2023.
The economic segment of the market is thriving, with transactions rising from 44% of the total in 2023 to 59% by October 2024. This surge in economy-class dwellings indicates a strong demand, which is crucial for maintaining market stability.
Average property prices in Vilnius have been quite stable, with only minor changes. For example, in October 2024, the average price of apartments nudged up by 0.21%, reaching EUR 3,392 per square meter. This price stability, along with the steady rise in transactions, suggests a balanced market environment.
Sources: Statista, Inreal, Lrytas, Lithuania Tribune
11) Property values in Užupis will rise as more artists and young professionals move in
Užupis is becoming a hotspot for artists and young professionals.
In 2023, property prices in Vilnius, where Užupis is located, saw a significant rise, making Užupis one of the most expensive areas due to gentrification and high demand. This trend is expected to continue, with property prices projected to rise further in 2025.
The neighborhood's artistic vibe is a major draw. The Art Incubator, a former factory turned into an artistic residency, offers affordable studios for young artists, fostering a creative community. Additionally, the streets of Užupis are adorned with numerous art installations, enhancing its reputation as a vibrant artistic hub.
Užupis is also attracting a growing number of young professionals and artists. The population has been steadily increasing, with a significant portion of residents being artists. This influx of creative individuals contributes to the neighborhood's innovative and anti-conformist atmosphere, making it a preferred destination for those seeking a unique and inspiring environment.
Užupis is also attracting a growing number of young professionals and artists. The population has been steadily increasing, with a significant portion of residents being artists. This influx of creative individuals contributes to the neighborhood's innovative and anti-conformist atmosphere, making it a preferred destination for those seeking a unique and inspiring environment.
Užupis is also attracting a growing number of young professionals and artists. The population has been steadily increasing, with a significant portion of residents being artists. This influx of creative individuals contributes to the neighborhood's innovative and anti-conformist atmosphere, making it a preferred destination for those seeking a unique and inspiring environment.
Sources: Global Property Guide, LRT News, Euronews
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12) Demand for affordable rentals near universities will grow as the student population increases in the city
Vilnius is seeing a surge in student numbers, which is driving up the demand for affordable rentals near universities.
In 2024, Vilnius University welcomed 7,338 new students, adding to the city's bustling student scene. This influx naturally means more students are on the hunt for housing close to their classes.
Among these students, 3,010 are international, mostly full-timers who prefer living near campus. They want easy access to facilities and a chance to dive into university life, which pushes up the need for nearby rentals.
Surveys show that students generally want to live close to their universities. But with university dorms only able to house 5,500 students, many have to look elsewhere. This limited space, combined with rising rents, makes affordable housing even more crucial.
Rental prices near universities are climbing, making it tough for students to find budget-friendly options. This situation is a real challenge for those who need to live close to their studies.
Sources: Vilnius University Facts and Figures, Delfi
13) Rent prices in the city will rise moderately as the expat community grows
Vilnius is becoming a hotspot for expatriates, with the foreign population nearly doubling to 73,000 by the end of 2023.
This influx is largely driven by young professionals in tech and finance, who are flocking to the city for its vibrant job market. Many of these newcomers prefer renting over buying, thanks to Vilnius's attractive rental yield of 5.47%. This trend is particularly noticeable in the city center, where demand for rental properties is on the rise.
Vilnius is carving out a name for itself as a tech hub in the Baltics, drawing in multinational companies and a dynamic workforce. This economic boom, fueled by sectors like IT and fintech, is pushing up the demand for rental properties. As a result, rental prices have been climbing steadily.
From January to July 2024, rental prices in Vilnius grew by an average of 6.5%. This moderate increase is a direct response to the growing expatriate community and the city's economic expansion. The real estate market is thriving, with more people looking to rent than ever before.
For those considering a move to Vilnius, it's worth noting that the city offers a unique blend of old-world charm and modern amenities. The influx of expatriates is not just changing the rental market; it's also adding to the city's cultural diversity and vibrancy.
Whether you're looking to invest or find a new place to call home, Vilnius's evolving landscape offers plenty of opportunities. The city's growth is a testament to its appeal as a destination for both work and leisure.
Sources: Wikipedia, The Luxury Playbook, InRento
14) Vilnius will see fewer foreign buyers as other European markets become more appealing
Vilnius property prices jumped by 10.49% in 2023, making it less appealing compared to other European cities.
In Vilnius, rental yields are lower than in Kaunas and Klaipėda, which means investors might not get the returns they expect. This makes Vilnius less attractive for foreign buyers looking for better investment opportunities.
Other European countries are stepping up their game with improved economic conditions and enticing incentives for foreign buyers. For example, Istanbul offers higher gross rental yields, ranging from 3.75% to 9.72%, which are more appealing to real estate investors than what Vilnius can offer.
In cities like Istanbul, the potential for higher returns is drawing more attention from international investors, making them reconsider their options in Vilnius.
As these trends continue, foreign buyers might shift their focus to more promising markets in Europe, leaving Vilnius with fewer international investors.
With other European markets becoming more attractive, the number of foreign buyers in Vilnius is likely to decline.
Sources: Global Property Guide, The Luxury Playbook
We have made this infographic to give you a quick and clear snapshot of the property market in Lithuania. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
15) Foreign buyer interest in the city’s real estate will stabilize as global economic conditions change
Vilnius is becoming a hotspot for young professionals and expatriates, driving up rental yields.
In 2022, rental prices in Vilnius jumped by 26.7%, thanks to the influx of international residents. By late 2023, the city was home to 73,000 expatriates, showing a steady interest from foreign buyers. This makes Vilnius an increasingly attractive place for those looking to invest in property.
Even though Lithuania saw a dip in foreign direct investment, it wasn't due to a lack of interest in real estate. Instead, geopolitical risks and rising labor costs were the main culprits. The Lithuanian government is still offering incentives like residency permits for urban real estate investments, keeping Vilnius on the radar for foreign investors.
In 2023, property prices in Vilnius rose by 9.08%, signaling a move towards stabilization. The market is adjusting to global economic shifts, despite the temporary instability caused by the ongoing war in Ukraine. Experts say the housing market is sluggish, with fewer home purchases, but this suggests a cautious yet stable environment for foreign buyers.
Sources: Invest Lithuania, Global Property Guide
16) Vilnius property development will shift as new policies promote sustainable building practices
In recent years, the Lithuanian government has been actively promoting sustainable building practices, which has significantly impacted property development in Vilnius. In 2023 and 2024, new regulations were introduced, requiring public buildings to be constructed with at least 50% wood and organic materials starting from November 2024. This move is part of a broader initiative to encourage the use of eco-friendly materials in construction projects.
Additionally, the government has been investing heavily in green building projects, such as the Launagiai district development. This project, with a budget of about 1 billion euros, aims to create thousands of new homes, schools, and shopping centers, all designed with sustainability in mind. Such investments highlight the government's commitment to fostering sustainable urban development.
Moreover, Lithuania has been pushing for green building certifications like BREEAM and LEED, which will become mandatory from 2025. This requirement reflects a growing trend towards sustainable building practices and ensures that new developments meet high environmental standards. The introduction of these certifications is expected to drive developers to adopt more sustainable methods in their projects.
Sources: RFI
17) Investment strategies in Vilnius real estate will shift due to changes in property tax regulations
Changes in property tax regulations can significantly influence investment strategies in Vilnius's real estate market. For instance, the introduction of the Real Estate Tax (RET) in 2013 made it more expensive to own high-value properties, prompting investors to reconsider their strategies.
Investors are particularly sensitive to tax changes, as seen in the study by Global Property Guide, which highlights the attractive rental yield in Vilnius. However, the moderate income tax on rent means investors must carefully weigh tax implications when making decisions.
Moreover, the Lithuanian government's initiatives to simplify tax procedures and reduce rates have positively impacted the market. The exemption of properties valued up to EUR 150,000 from tax has encouraged more investments, showing how tax policies can drive market dynamics.
Sources: Deloitte, Glimstedt, Euronews
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.