Development of real estate has the potential to advance sustainability in terms of environmental, economic and social criteria. This is particularly important in residential sector as it plays a crucial role in the lives of habitats and directly influences their welfare. As the population grows and cities expand, the demand for real estate increases. Assurance of sustainability in the residential projects becomes a new concern of real estate developers. The aim of present research is to propose multiple criteria assessment based methodology for sustainability evaluation of the new residential projects. The article consists of three main parts. In the first part the concept of sustainable development and its key pillars in residential construction are analysed. In the second part proposed sustainability evaluation methodology, based on multiple criteria assessment methods SAW and COPRAS, explained. In the third part the proposed methodology is applied to evaluate the sustainability of five residential developments in Vilnius, Lithuania. Research revealed that achievement of sustainability in residential projects is directly related to energy efficiency, urban planning, development of convenient infrastructure and community building.