Archived Articles

Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

Global Real Estate Project
News Index

Directories
  Int'l Realty
  US Realty

The former Soviet republic of Lithuania declared its independence from Moscow in March 1990 but it was only after the abortive Soviet military coup in August 1991 that it regained its full independence lost in 1940. Its population of some 3,7 million is composed of ethnic Lithuanians (80 percent), Russians (10 percent) and Poles (7 percent). Lithuanians living abroad, mostly in the USA, Russia and Western Europe, total about 1 million.

Lithuania has been invited by the European Union in December 1999 to begin talks for entering the organization and now the country is hoping to reach that goal by 2005. The other main foreign policy goal is to become a member of NATO. The financial system in Lithuania is characterized by stability, which is obvious comparing it to some other former Soviet Union republics. Lithuania has reduced its annual rate of inflation from over 1000 percent in 1992 (the first full year of independence) to only 2 percent in 1999. The national currency - litas, has been fixed to the US dollar at a rate of 4 litas to $1 since May 1994. The central bank of Lithuania recently announced that the litas will be fixed to the European Union monetary unit - euro in the second quarter of 2001.

A real estate market began to develop in Lithuania as early as 1991, when the national parliament passed the Apartment Privatization Bill, allowing citizens to buy their state-owned apartments. At the beginning of 90s the class of small entrepreneurs started to form and soon became one of the main players at the real estate market. During the last decade the prices for residential properties in the country rose from $100 per sq.meter to their actual levels 5 to 10 times higher. Since 1991 the prices have risen steadily, with some exceptions such as in 1993 when the Soviet army left Lithuania, flooding the market with their privatized apartments.

In 1997 the larger commercial banks began to offer residential properties buyers 10-year mortgages on apartments, with interest rates at 12 percent per year (the inflation in 1998 and 1999 has fallen to 2 percent annually). The added liquidity began to push prices up, particularly in the capital of Vilnius (600,000) and the second biggest city of Kaunas (410,000).

In the Vilnius downtown the new apartments and houses cost around $1000-$1100 per sq.meter (1 sq.meter=10 sq.feet). The old but renovated residential properties can be found for $900 per sq.meter and the unrenovated reach as low as $500-$600 per sq.meter. In the prestigious suburbs the prices are $700-$750, $500-$650 and $350-500 respectively. In the other residential areas the prices are one-third below the levels in the prestigious areas and in the ordinary suburbs you can need as low as $250 per sq.meter to buy a condo. In the second biggest town in Lithuania - Kaunas, the downtown apartments hardly can reach $500 per sq.meter, but some houses are sold for as high as $800 per sq.meter. In the suburbs the apartments are bought for just $150 per sq.meter and the houses between $250 and $450 per sq.meter.

If you want to rent an apartment in Vilnius for residential purposes, it will cost you between $200-$300 per month for 1BR and $1300 for 4BR in the city center*. The house rents vary between $1000 a month in the suburbs and $4000 in the downtown**. In the other big cities in the country the apartments for renting depending on location may be found for as low as $150 per month and the houses as high as $3000 a month.

In the commercial real estate market the leading position is also taken by the capital city. In its center the office space can be rented between $10 and $20/sq.meter a month. The retail spaces can reach as high as $40/sq.meter per month. In the capital suburbs the rents for offices and retail businesses diminish to $2-5/sq.meter a month. Approximately the same are rent levels for the warehouses***. In Kaunas the commercial rents are twice lower than those in Vilnius. For sale per sq.meter the offices in the capital city center vary between $600 and $1800 depending on exact location. The retail businesses can be bought as high as $3500 per sq.meter. In the city suburbs the prices are 2-3 times lower. In Kaunas the commercial real estates are sold at the prices equal to those in the capital of Vilnius but this concerns only the properties on the ground floor. In the higher floors in Kaunas the prices diminish 2-3 times.

Three years is the most common length of a lease in Lithuania, although it is often possible to negotiate a somewhat longer or shorter period. Consent of both sides is required to extend a lease. Termination clauses of the contracts generally require 30 days notice.

After the sharp falling of land prices in 1998 which was due to the Russian financial crises, in 2000 they became more expensive by 25 percent. In some luxurious areas of the capital the prices has reached $100/sq.meter. In the other regions the land for residential development can be bought for between $10 and $50/sq.meter.

Foreigners may own buildings in Lithuania but are not allowed to purchase land. Companies from the European Union (EU) have the right to own land only if it is directly attached to the bought buildings. Even in these cases, the buyer has to receive a permission by the government and the acquired land must be used specifically for the purposes outlined in the company's charter. An amendment to the property laws allowing unrestricted sale of land to foreigners and foreign companies is expected to take effect upon the acceptance of Lithuania into the EU. Lithuanian law is always applied to international transactions concerning real estate located in the country.

-------------

* These are rents paid to the landlord. The tenants have to pay additional 18 percent (if they are companies) or 25 percent (if they are private persons) as Value Added Tax (VAT). They have also to pay utilities and service charges (usually $1 3 per month).

** In the rental market, almost all demand for residential space comes from foreigners looking for apartments in the Old Town of Vilnius.

*** Commercial rents in Vilnius have fallen by 15 25 percent since the beginning of the 2000. The majority of the offices are still class B and C by Western standards.

--------------------

See also the directory of companies providing real estate services in, and general real estate information of Lithuania.