Lithuania needs comprehensive solutions to improve housing affordability, says Environment Ministry

The Environment Ministry of Lithuania, together with partners, has published an assessment of opportunities to improve housing affordability in the country, stating that comprehensive solutions are needed to address the issue, according to ELTA.

The ministry highlights the necessity of increasing housing supply, improving affordability, expanding social and municipal housing, and making better use of the existing housing stock. Environment Minister Kęstutis Žuromskas emphasized that housing affordability is currently one of the most important social and economic policy issues.

“The results of this assessment will be crucial in developing a long-term quality housing affordability policy in Lithuania and reducing financial barriers for young families and vulnerable groups,” the ministry stated.

The assessment identifies a significant shortage of affordable housing in the regions as a major problem. Due to low economic viability, real estate developers often avoid new projects in these areas, leading to a lack of modern housing in some municipalities. Meanwhile, in major cities and resorts, housing demand is driven by population growth and investment purchases.

Between 2010 and 2024, the number of households renting homes in Lithuania more than doubled, from 86,000 to 181,500, while the number of households receiving state housing support increased from 5,200 to 20,600. However, a quarter of the country’s population still lives in overcrowded housing, and 8.6% face poor housing quality issues. Additionally, many residential buildings remain energy-inefficient and require renovation.

Young families struggle with high prices, long saving periods, and strict lending conditions when purchasing their first home. The report also notes Lithuania’s small social housing sector, one of the smallest in the EU, leading to multi-year waiting times for some residents.

Experts recommend expanding the municipal housing stock, accelerating territorial planning and building permit procedures, and encouraging investment in the regions. The assessment results will be used to develop a national housing affordability strategy, expected to be completed by the end of the year.