No major signs of recovery in Baltic property markets

Residential property prices in some parts of the Baltic are slowly edging up while prices in others are still negative, according to the latest Ober-Haus Baltic Apartment Price Index.

It also shows that prices in some locations such as Riga and Tallin are 60% and 40%, respectively, down from the peak of the market in 2007.

The report shows that in May 2011 apartment prices in Vilnius increased by 0.2% and the average price now is €1,202 per square meter.

Annual price change in Vilnius jumped to 4.2%. From the highest recorded apartment price level, which was reached in December 2007, to May of this year apartment prices in Vilnius have dropped by 39.4%.

In May prices in Kaunas, the second largest city in Lithuania, fell by 0.3%. No changes were recorded in the other major cities of Klaipėda, Šiauliai and Panevėžys. The annual apartment price changes in these cities remains negative, down 3.9% in Kaunas, down 3.3% in Klaipėda, down 2.3% in Šiauliai, and down 1.6% in Panevėžys.

The average apartment price also fell in Tallinn, down 2.3% in May after increasing by 11.8% in April. But on an annual basis the average apartment price has increased 6.6% to €1,023 per square meter.

The number of transactions from January to May 2011 decreased by 8.4% compared with the same period in 2010. From the highest recorded apartment price level, which was reached in April 2007, to May of this year apartment prices in Tallinn have now dropped by 40.1%.

Apartment prices in Riga didn’t change in May and have remained stable for two months in a row with an average price of €937 per square meter.

According to the report local buyers have shown interest in small two and three room apartments and it is noted that there is also a strong interest in bank seized apartments because they are usually offered at bargain prices.

During the past 12 months the prices of apartments in Riga have increased by 4.5%. But from the peak of the market in May 2007, prices are down by 59.7%.