5,000 German troops in Lithuania – what will be the effect on the real estate market?

Under the existing plans, around 5,000 German brigade troops with families are expected to arrive in Lithuania by 2026. Some of them will stay in Lithuania’s main cities, boosting the property market. 

According to the Defence Ministry, the majority of the German brigade will be stationed in Rūdninkai and Rukla where the troops will live in barracks.

The Rūdnininkai military training ground will be able to accommodate up to 3,000 troops once construction is completed, so it is realistic that up to 2,000 troops will live in other Lithuanian cities.

“As far as their families are concerned, it is likely that they will have to use the existing housing supply, either to buy or rent. A few hundred families will not make any significant impact,” Tomas Sovijus Kvainickas, head of investment and analysis at Inreal Group, said when asked how the arrival of the German troops and their families could affect the prices in Vilnius and Kaunas real estate markets.

“There was a shortage of supply when there was an influx of war refugees from Ukraine. The supply was reduced to a few hundred apartments, and they became extremely expensive, but the numbers were quite different. A few hundred people will certainly not create that kind of pressure,” he added.

According to the real estate analyst, there are usually between 1,000 and 2,000 thousand apartments available for rent in Vilnius at any given moment.

He also mentioned that separate neighbourhoods could be built in Vilnius and Kaunas to accommodate the German soldiers and their families. However, this is the first permanent deployment of German troops abroad, so their preferences are not clear.

“If we take the American example, we would have to create a town with schools, medical facilities, housing. It would be difficult to do this in Vilnius, but not impossible,” Kvainickas said.

If the newcomers were to settle in a specially created area, the impact on the real estate market would be small, but the new neighbourhood could boost nearby businesses, such as cafes, sports clubs, and entertainment, he noted.

However, it is not yet clear how many German brigade soldiers would come to Lithuania with their families, so it is too early to say what their needs might be, Kvainickas added.