The Ukrainian real estate market is surprising and alarming. What to expect and what will happen next with apartment prices?
The previous year was explosive for the Ukrainian real estate market — the growth in the cost per square meter averaged 17-18%. Since the summer, the demand for real estate, both in the secondary and primary markets, has grown by leaps and bounds. But already in January, the market... practically froze. What happened? We discussed it with Maksim Barbash, a participant in the United Property Expo international real estate exhibition and the head of the board of directors of the construction company GEOS: what to expect from prices for apartments in Ukraine? Why is consumer demand no longer as active as it was a month ago?
Rising prices for apartments, growing requirements for developers and a «boom» in consumer activity
According to the State Statistical Committee of Ukraine, in 2021, the cost of housing in the secondary market increased by more than 18%. At the same time, the primary market is not lagging behind, either — the cost per square meter increased by 16.7%. At the same time, here is an interesting fact: among new buildings, three-room apartments have risen in price most of all, while the secondary market favors one-room apartments (in both cases, the growth was about 18%).
According to experts, in the next few years there will be a real «boom» among new buildings, organized according to the principle of a city within a city. At the same time, low-rise construction (like townhouses) will not be in such great demand.
As for prices, the market is offering the maximum backlash now, and it can «catch» both an ordinary buyer and an experienced investor. The average cost per square meter in the secondary market in large regional cities was about $985 per square meter, while in the capital of Ukraine, Kyiv, the average cost per square meter is $2,100.
— Most players in the real estate market around the world use credit funds. In Ukraine, this figure is not so high, but in any case, by the volume of loans issued, one can partly judge the real activity of the market. According to the National Bank of Ukraine, the volume of real estate credited in 2021 increased by about 2.5 times — for 11 months of last year, the total amount of mortgage loans amounted to UAH 7.9 billion. If we add to this data the buyers who purchase housing at their own expense (or expand with a surcharge), then we will see that the real estate market is now really active and demand currently exceeds supply, — explained the head of the board of directors of the construction company GEOS Maxim Barbash. — High demand, of course, affects the rise in prices. However, in my opinion, this is not a determining factor. As always, such a sharp increase in the cost per square meter in the secondary market is also affected by rising prices in the primary market. Construction companies were largely forced to raise prices, mainly due to the rise in the cost of the construction process itself. Undoubtedly, it was not the only factor, but, in my opinion, it was the determining factor in this case.
We are also seeing an increase in the «bar» for investor entry, an increase in the number of requirements for construction companies, and, as a result, a more demanding attitude towards real estate. Whilst earlier investors did not delve too deeply into the details of construction projects in large cities of Ukraine, as they realized that they would still receive from 50% to 100% of the income when reselling a property, now more and more buyers thoroughly study the market before investing. Nowadays, buyers immediately try to find out what kind of infrastructure will be built, what exactly will be implemented and when. Now it is not enough just to build a house — you need to provide the buyer with a certain level of comfort. And I believe that this is a positive trend that will increase the level of construction, both for residential facilities and infrastructure. But this trend also affects the cost of construction.
However, it is worth mentioning the pitfalls of the market. Whereas in the past six months we have observed an increase in buying activity, then in January 2022 this growth stopped. This is mainly influenced by the difficult foreign policy situation, and how the market (and not only it) will behave further is now almost impossible to predict.
At the same time, we are all waiting for the launch of the «Ukrainian Dream» mortgage program, thanks to which every Ukrainian will be able to take out a loan for real estate at 5% per annum. If this program works, we will again see a surge in demand, and hence prices.
In short, I can say that, under favorable economic and political conditions, as well as effective legislative changes in the field of urban planning, the cost of housing in 2022 will grow. If you want to get the most complete information about our project and more, come to the international real estate exhibition «United Property Expo», which will be held from February 16 to February 17, 2022 in Kyiv. There, you will get the chance to personally communicate with realtors and developers and find the property that you need.
How to buy an apartment and not burn out on prices? All information will be available at the «United Property Expo» exhibition, which will be held from February 16 to 17 in Kyiv
To make sure you choose the right property in Ukraine and around the world, you need to attend and see all the information about these properties at the international real estate exhibition «United Property Expo», which will be held from February 16 to 17, 2022 at the International Exhibition Center (Brovarskoy Avenue, 15, Kyiv).
«United Property Expo» will feature over 10,000 properties. These are modern residential complexes, country villas and townhouses, commercial premises, and cozy apartments. Within the framework of the exhibition, a two-day conference of real estate specialists will be held. Conference participants are waiting for new data on real estate lending, prospects for investment in residential and commercial properties, as well as a forecast for the development of the real estate market for 2022.
All information about the exhibition can be found .
The ticket price for «United Property Expo» visitors is UAH 220. But! With the RealtingFree promo code, you can get tickets for free! You can order your tickets with free delivery at this .
If you are interested in participating in the exhibition as an exhibitor, you can send a request for more detailed information.
«United Expo» LLC
Tel: +38 (063) 103-48-17,
e-mail: [email protected].