THE RESTRICTIONS OF ENERGY CLASS WILL NOT INCREASE THE PRICES OF REAL ESTATE
The developers of country’s real estate say that the technical requirement, which says that since 2016 buildings with no lower than A-class energy efficiency should be built, can increase their construction costs up to 15 percent, consequently, the prices for new buildings supply will increase. However, it is difficult to see the assumptions for the increase of new buildings’ prices in the future. The situation of 2013 should be repeated, when the developers hurried to get building permits for buildings with lower energy class.
First of all, it should be noted that, although in the second half of this year the sales of new construction apartments in Vilnius were stabilized, the number of new projects in the market is still growing rapidly. This factor indicates the decrease in growth rates of the average price of new apartments or stabilization in the near future. The number of unsold apartments in Vilnius, which has been rapidly growing this year, will decrease in 2015, since the sales slowed significantly. For this reason, next year the developers should slow down the speed of construction of new apartment complexes, which is very fast currently.
Based on these assumptions, one can predict that next year the average price of new construction apartments in Vilnius should remain stable or increase not more than inflation. The assumptions of price growth in 2015 could be external or legal – since 2016 building permits for no lower than A-class energy efficiency buildings will be issued in Lithuania. The construction of such a buildings is much more expensive than the price of B-class apartments that are currently permitted to build and dominant in the market, therefore, the sales price is 10-20% higher.
However, we expect that next year developers will rush to get more building permits for B-class energy apartments, which they will be able to build in 2016 and later. A similar situation was in 2013, when the number of issued construction permits increased up by a quarter. This reflected the prohibition valid in Lithuania from the beginning of 2014 and forbidding to develop buildings with lower than B-class energy efficiency. Therefore, it is likely that in 2015 the rates of building permits will increase rapidly, as developers will seek to ensure the opportunity to continue building B-class apartments in the future.
As confirmed by the lawyer Simona Oliškevičiūtė-Cicėnienė, the head of “Raidla Lejins&Norcous” real estate and infrastructure department, with building permits obtained till 2016 the developers will be able to build apartments with a lower energy efficiency class for an unlimited period of time.
“Statutory provisions requiring from the year 2016 to build no less than A-class efficiency buildings are associated specifically with the moment of issue of the document permitting construction (or the start of construction work, if a document permitting construction is not required for the construction). The regulation does not specify any cases when it is mandatory to change the design documentation of the building (to provide a higher energy efficiency class), if a valid building permit is already issued. It should be noted that the edit of Law on Construction valid in Lithuania since 2014 cancelled the validity periods of documents permitting construction, i.e. now they are valid for an unlimited period,”- says Mrs. Oliškevičiūtė-Cicėnienė.
We predict that this year in total 5900 construction permits should be issued in Lithuania for new residential buildings, next year this number should increase to 7100, and in 2016 – significantly decrease to 6100. According to the information of the Department of Statistics, last year 6571 such permits were issued, in 2012 the number was 5378.