Research from Citus shows that the importance of housing prices has decreased. But is that really the case?

This survey interviewed more than 500 residents of Vilnius and Kaunas who had plans to buy a home within the last few years, or had been looking for a home over the previous few years or intended to do so in the near future. Respondents were asked what was most important to them when choosing a home.

From the responses provided, the most noticeable factor (for this year) is the decreased importance of prices and location, with 82% and 78% of the participants in the survey (respectively) indicating these things as the most crucial criteria. Last year, these questions saw response rates of 89% and 84%; and, in 2021, according to the results, the factor of location in the city was even more important than the price (slightly). Such a low result with the price factor has only ever been paralleled in 2021 – with the onset of the housing buying frenzy.

„This can be explained by the prevailing perception that 'either this or that is expensive'. In light of an expectation of falling prices that never occurred, coupled with rising Euribor rates, the overall perception of the importance of price has been diminished. It is no coincidence that the importance of the acquisition's financial terms – the down payment amount, the staggering of instalments’, and bank lending – has increased. It increased by 6 percentage points, from 28% to 34%, even though it had been consistently decreasing in previous years,“ explained Andželika Keršytė, Citus’ Sales Manager.

She highlights the importance of the layout and size of the home (this has increased from 46% to 51%), along with that of infrastructure or distance away from major daily amenities (this has increased from 36% to 46%), and that of energy efficiency class (this has increased from 33% to 40%); while recommendations from friends and acquaintances (which have increased from 6% to 11%) have increased even more this year. That said, according to the respondents, the least essential criterion was parking availability (from 53% to 47%).

„Inflation, urban development trends and changes in the transport situation are all things that may have contributed to these changes. However, in reality, people make their housing decisions based on varying criteria, and these changes are somewhat worrying,“ said A. Keršytė.

A deeper analysis of the survey results shows that the previously essential aspects of quality, reliability, developer reputation, professionalism, and location remain the most important ones. Still, their relative influence on the factor of choice has been reduced by almost 50%.

Citus’ sales manager, who has been involved in many meetings with customers, has pointed out that, lately, people are more likely to compromise their needs for discounts because they can't always get what they want and are looking for. There can be no doubt that, with a fall in affordability and developers having become more willing to offer discounts and negotiate with buyers, the goal of finding the best deal has become all the more significant. However, according to the expert, this shouldn’t overshadow all the other criteria.

„We notice that people sometimes come to meetings after seeing an advertisement for a new offer. They also tend to be less prepared; and sometimes they haven't even taken the first step, and this includes assessing their financial capabilities. As a result, they cannot fulfil their needs and, due to financial constraints, they are left needing to choose a different location or a less appealing project. With this – such as it has been in recent days – a larger discount often influences the decision,“ says A. Keršytė.

She reminds us that housing is one of the most significant and responsibility-demanding investments, regardless of the circumstances. Buying a home requires time, careful preparation and considerable homework. It is also essential to consider future developments, such as lower monthly repayments due to the falling Euribor, expected rising wages, etc.

When you’re beginning your search for a home, it is crucial not to rush and visit at least 5 projects – simply checking the website of someone offering a project which seems appealing is not enough. You need to identify your needs and gather as much information as possible about the advantages of projects in their development phase. Most people usually know the size and number of rooms the property should have and the floor they want to live on. However, they often overlook technological and social solutions, these including energy efficiency class, heating technologies, and life and leisure comfort solutions.

In your budget planning, it is essential that you know the minimum amount you would like to spend and the maximum amount that you cannot exceed – if you make a purchase off a bank loan, this will be the loan amount provided.

When evaluating different projects, it is important to assess not only their total cost, i.e., the amount covered by a bank loan (if a project is purchased through a bank), but also monthly maintenance and other expenses that may arise due to the specific choice of property – operational costs, daily trips to essential locations (work, school or nursery, grocery store, sports club etc.), energy efficiency class – which, the higher it is, the more savings it allows – and so on.

Sometimes, this reveals that a cheaper project in the overall sum will only be marginally less expensive each month in connection with loan repayments, but they may lack certain advantages. On the other hand, a more expensive project may allow savings in maintenance or other daily costs, which could compensate for the price difference.

Today, changing homes is no longer a one-time life event, and when circumstances change, or new dreams arise, it is important to sell the existing property successfully at the right time. Property liquidity is influenced by the location and the district's potential over 5–10-years, and by the infrastructure, technological and social solutions implemented in the property. An assessment of the area and its potential can be facilitated by a specialist in the respective field, and it's worth looking into the city's development strategy when seeking to determine a specific location.

In the long run, the most valuable properties will be those which have implemented the latest technical solutions (construction materials, energy efficiency solutions, etc.) and which have the best social solutions (community, courtyard spaces and equipment, etc.) and are located in an area surrounded by well-developed infrastructure.

Property sellers aim to attract customers with discounts or gifts. It is nevertheless crucial to choose projects based on their merits and to take the time to view them first-hand; and it should be based primarily on their benefits. It is necessary to understand why discounts are offered, and whether it’s necessary to dispense with the remaining units within a small project, this including selling off less attractive properties, or standing out in a competitive environment. Perhaps the company is having to contend with financial problems? Or was the price increased before a discount was subsequently applied?

Choosing an unreliable developer brings about the risk of losing your initial deposit. Still, the greatest threat is that, if the company goes bankrupt at some point in the future, the buyer may lose all their guarantees, and fixing poor-quality work will also weigh on the owner's head and their wallet. One of the most notable reliability indicators is a long presence in the market and a successful track record of completed projects and plans.

„We understand that aligning housing needs and financial capabilities is not so easy in times like these, and with this we always recommend that, if you can secure bank financing for your dream home, consider the possibility that the monthly instalment might decrease and become more embraceable over the next 1–2 years. It should be understood from this that compromising your or your family's needs for a more attractive project at a discount over a more extended period is not the best solution,“ said Citus’ Sales Manager.

Negotiations – a Current Topic

„These days, negotiating when buying a home is common and even necessary. However, negotiations should not be viewed as battle scenarios, where each party tries to do nothing but extract the maximum benefit for itself while viewing the seller as an opponent trying to do the same. Negotiating is a game of tactics and diplomacy in which two equal partners must achieve the most beneficial result for both sides. It is more like climbing a mountain together than a cat and mouse game,“ says the expert.

„We must take note of the fact that housing may become even more unaffordable over time. With this, first and foremost, it is essential to find an affordable option that best meets our needs, and to negotiate with the seller in pursuit of the best terms. We are seeking the largest discount, and may find it in a project that does not meet our needs. We need to think broadly, and assess the developer's reliability and ability to offer a price that suits our needs,“ she repeats.

Andželika Keršytė recommends initially defining the most important things in a housing deal, and strictly adhering to them. A booming housing deal cannot be considered a possibility solely because a reasonable price has been negotiated. The most crucial factor is that the property satisfies existing needs and goals. Only then can one assess the quality of communication with the seller, assistance in the selection stage, the smoothness of the entire process, the overall cost of the property, and the size and terms of payments. Did you also receive gifts? Well then, congratulations, your deal has truly been successful!

Break down the purchasing process into the following stages: the first meeting to take place as part of the choosing of a home; preparation for negotiations – searching for information and establishing positions; negotiations and finding compromises; the clarification of final conditions and securing details in writing (reservation agreement, preliminary purchase agreement, etc.); completion of the purchase – shake hands.

During the first meeting, agree on needs and expectations. At this stage, do not start negotiating purchase conditions. Concentrate on what you are looking for and what you truly need. Choose the property for negotiation, and then you will need to do your homework – find out if the price is justified, understand the seller's tactics, and determine how to proceed.

People often interact with sellers based on mistaken stereotypes – try to dispel these. Respect the person you are communicating with – you are equal partners in this process.

It is to be expected that you should not show that you like the property you've seen, for this may weaken your negotiating position. On the contrary: if you express emotion and show why you like the property, the seller will be more motivated to help you acquire the property and offer the best conditions.

At the end of the day, after you have selected a property, and engaged in consulting with specialists, and determined whether the price offered is fair, the next step is to negotiate the purchase conditions and the final price. This becomes the focus of the second stage – negotiations. If you want to achieve the best results in your negotiations, it pays to take the time to prepare.

Start by determining how much you can negotiate on the price. Negotiations on the price are almost always possible, but stating that you want to save or that the price is too high will not be enough to suffice as an argument. The price difference you can negotiate may depend on the actual property value, the seller's discount or gift strategy, what you can offer the seller yourself, and, ultimately, the specific characteristics of the property and the property developer; things which can serve as arguments.

However, you can negotiate certain conditions even if the listed property price is fair and the seller does not offer discounts, or offers smaller ones. In such cases, consider your options: perhaps pay a larger initial deposit, maybe even the entire property price upfront, agree on a plan to buy more than one property at once (for investments, parents, or children), or bring in additional property buyers through referrals. Such proposals will encourage the seller to make more effort.

Another way to get a better offer is to analyse a specific property. When you compare several similar units within a single project, you may find that one may have a slightly smaller balcony or a less favourable orientation, but these factors might not bother you. In such cases, you can negotiate better conditions just as well.

1. Your goal should be co-operation, not a battle over terms.

2. Be in control of the situation; manage the flow of the conversation.

3. Do not start the meeting with negotiations on terms.

4. Don't be afraid to show that you like the property.

5. Clearly and openly state the conditions you desire.

6. Listen carefully – it demonstrates respect.

7. Seek solutions and move towards the goal together (see point #1).

8. It is very important to never negotiate terms over the phone or email; do it only in person.