Development of real estate has the potential to advance sustainability. This is particularly important in residential sector as it plays a crucial role in the lives of habitats and directly influences their welfare. As populations grow and cities expand, the demand for real estate increases and construction volumes rise. Assurance of sustainability in the residential projects becomes a new concern of real estate developers and construction companies. This article aims to analyse in more detail the concept of a sustainable residential construction and the evaluation criteria. In the first part the concept of sustainable development and its dimensions in residential construction are analysed. The second part describes the research methodology. In the third part, the research methodology is applied to the evaluation of five residential construction projects in Vilnius, Lithuania. The fourth part describes the possibilities of using wooden construction to improve the sustainability of residential construction projects.