The Ukrainian real estate market can confidently say: “My years are my wealth.” 2022th and 2023-show positive dynamics and promising numbers. It seems that apartments and houses are not afraid of any changes because behind the dark stripe a blinding white one certainly appears. The New Year prepares for us even more offers for purchases и rental and promises to continue established trends.
What prices should you prepare your wallet for?
Of all the residential complexes currently under construction, more than 80% are “ghosts of the past” - projects whose implementation was planned for 2022-2023, but never took place on time. There is plenty to choose from, but at what price?
The greatest increase in prices will be observed for objects that please their investors with a stable pace of construction. If the average cost per square meter increases by 3-5% due to the low purchasing power of the population, then in such residential complexes the indicators will reach + 10-15% (in hryvnia). As for the secondary real estate market, it promises a price increase of 6-10% with subsequent stabilization. Rental market in 2023 could be described in just one word - prosperity. The last half of the year was the peak of demand and price increases. +50% in price brought considerable profit to those of our clients who invest in real estate for the purpose of its subsequent rental. You can follow their example and start the new year with a new passive business.
🏆 One-room apartments took honorable first place in the “Object of the Year” category. They not only became the most popular on the market, but also showed the greatest increase in price. Owners of such real estate know that skillful design touches can turn even a small room into cozy nest.
What affects construction costs and why is it important?
A stable economic situation helps the real estate market to stabilize, but not when there are a number of factors influencing the cost of construction and its rise in price:
- a stable increase in prices for raw materials, which cannot be avoided
- the detrimental impact of military operations on logistics has led to the formation of new, less profitable and more labor-intensive routes for the supply of construction materials, which negatively affects the prices of those same materials
- Part of the country’s territory remains in danger, and therefore activities there cannot proceed at the usual pace. As a result, we get a loss of working capacity, and therefore stagnation, an increase in the time and effort spent on what was previously possible to do much easier and faster
- Volunteers who became brave defenders of the state or brave employees of the State Emergency Service were recruited from various segments of the population, so there are plenty of builders among them, but there is a sharp shortage of qualified personnel at construction sites. Professionals are worth their weight in gold, which has a positive effect on their lives, but not the value of real estate
The rise in prices on the primary market will be especially noticeable in the first quarter of 2024. But, as you can see, it is not a whim of developers, but a completely justified necessity. The predicted increase in the cost of square meters is +15% (in hryvnia).
Which way is demand moving?
Of course, it is not only military operations and seasonality that affect demand. The interest of investors, as always, largely depends on completely objective factors, which even before the onset of 2022 remained key in making the decision “to buy or not to buy”:
- location
- price/area ratio
- builder reputation
- availability of building permits
- no debts or lawsuits
- possibility of purchasing in installments or by mortgage
- availability of discounts
- stage of construction and its pace
The last point is one of the most important because the difficult wartime forced even experienced and fearless developers to think about the advisability of continuing construction work. This year there was a sharp surge of strength and faith in success - more than 70% of developers returned to suspended activities. It is important that their passion does not diminish until the projects are put into operation.
For many Ukrainians, an additional factor of “inspiration” is the popular program “єOselya" So far, both developers and investors are looking at it. In 2023, only 1% of all purchased apartments in residential complexes are purchased under this program. Expert opinion states that the development of the state lending system will have a positive impact on demand and will significantly increase the purchasing power of citizens. The primary market will feel a pleasant change when rates increase from 1% to 25%, which is only 200-250 mortgages per month - quite realistic figures.
