7 February 2019, Vilnius. In 2018, four real estate (RE) developers operating in the capital sold around 1500 new apartments in Vilnius fulfilling approximately 39 percent of all the sales in the primary housing market of Vilnius. The liquidity ratio of these RE developers does not reach 1, while the total coefficient of Vilnius exceeds 1.3. INREAL analysed the 2018 results of over 80 RE developers of the capital: supply, sales and liquidity ratio.
Well-known RE developers with many years of experience and the highest supply: Eika, Hanner, Realco and Darnu Group form RE market trends, as well as the opinions and habits of buyers. The most significant success factors are large projects the development of which includes entire blocks instead of single buildings, and diversified project portfolio both by segment (economic, middle class, prestigious) and by location.
"It is easy to get lost in the RE market without sufficient knowledge and experience. People mistakenly believe that anything can be sold when the market is as active as it is now. However, the opposite is true – competition becomes significantly high. In addition to technical, experience and size criteria, "soft" elements are also becoming critical, i.e. well-managed marketing and a professional sales department which has people with significant experience and appropriate personal qualities", – says INREAL Chief Commercial Officer Julius Belanoška. There are examples of small and not very experienced RE developers whose project liquidity is very good. This shows that one of the success factors can be discovering unique niches instead of simply following the direction of large developers. Niches can be created by particular areas, exceptional project solutions, an individualized approach, etc. "By considering the plans that were announced by major developers, it is obvious that this trend will increase in 2019 – it will be even harder for start-ups or small RE developers to make their own share of sales. They will have to be creative and adapt to poor liquidity – longer-term sales or lower profit margin", – says J. Belanoška.
In 2018, RE developers offered a total of 4580 new housing units in the market of Vilnius. At the end of the year, the unsold apartment supply pool comprised of more than 5300 apartments. The capital's total primary housing market sales comprised of 3865 apartments, while the liquidity ratio increased from 1.23 to 1.36. This means that the sales period increased from 14 months to almost 16 months. The level of sales remained similar as over the past 3 years, however the activity of developers is currently particularly high. If the level of sales remains similar in 2019, competition between builders will become even fiercer, and the period of sales will become longer.
ABOUT INREAL
INREAL is a trademark of an idea, which gives spark to unique projects, basis for professional services, and added value to businesses, clients, and partners. INREAL positions creativity as a core value in the dynamic business world. INREAL Group, which consists of: UAB “Inreal valdymas”, UAB “Inreal”, and UAB “Inreal GEO”, provides probably the widest range of real estate services in Lithuania. Currently they have over 90 employees working for them in 11 cities in Lithuania. The company has engaged in business operations for over 20 years and implemented more than 50 real estate projects of various purposes, which received recognition and awards at contests not only in Lithuania but on an international scale as well. In 2015/16, 2016/17 and 2017/18 Inreal Group was named as the National Winner during the prestigious European Business Awards.In 2018, Smiltyne Yacht Club, developed by INREAL Group, became the winner of the main award in the competition “For a Sustainable Development”. In 2019, INREAL Group will celebrate its 25th year of operation.
More information:
Rūta Merčaitienė,
Head of Marketing and Communication at INREAL GROUP
+370 611 29 779 ruta.mercaitiene@inreal.lt
www.inreal.lt