According to the calculations of the Kyiv School of Economics in January 2024 more than 250 residential buildings were destroyed and their number is only growing. Despite this, the Ukrainian real estate market did not freeze in anticipation, but only became more lively, because now, more than ever before, there is an urgent need to increase the number of projects and to develop the affordable housing sector. Resistance to adversity and desire for change are two main characteristics of today's Ukrainian real estate market. While experts do positive forecasts, we decided to assess the real situation and current trends in order to find out what is happening and how it affects the decisions of investors.
What is happening now
The pre-war year 2021 was the peak of purchasing power and demand for housing. If not for the beginning of a full-scale invasion, this trend would surely continue. However, it did not happen as expected. On February 24, 2022, all construction sites simultaneously froze in silence. Because of this, the number of completed projects dropped sharply by 38%. Developers have recovered from the initial shock and resumed their activities, but they still cannot catch up to the previous pace, let alone compensate for the mercilessly destroyed houses with new residential complexes. If statistics are to be believed, more buildings have been destroyed since the beginning of the war than have been built in the last seven years. Companies would like to build more, but they are very limited in terms of territory, because currently they can build their projects only in safe areas, away from active combat zones.
Investors have also moved away from the initial shock, as evidenced by the growth in demand. Not only native Ukrainian cities and villages, but also objects on the international market were in the field of view of buyers. The war became an impetus for the expansion of investment portfolios. Special attention is paid to commercial innocence, which in the first months after the beginning of the invasion was completely out of the game. Experts claim that Ukrainian real estate is surprisingly promising, therefore, after the reconstruction of the state, we should expect a rapid influx of investment capital from abroad. But this is already a topic for reflection in our next chapter.
What to expect in the near future
It is always difficult to make predictions in the conditions of war, because no one can control the arbitrariness of the enemy and know his next steps, but one thing is certain - after the end of the war, there will be a rapid recovery in all areas, and in particular, real estate. The reconstruction of Ukraine will generate even greater interest in the purchase of residential and commercial real estate, which will significantly increase sales figures. Many times more projects will appear, because the volume of safe territories will increase. Maybe in a few years you will buy with our help dacha on the Crimean coast.
The state will actively help developers and investors. Yes, there are already programs for financing the construction and restoration of damaged or destroyed buildings. In particular, the state initiative aimed at issuing affordable loans - "eOselya" - is quite popular. The state will make efforts on a larger scale. Experts predict the rapid development of urban infrastructure:
- construction of medical institutions;
- creation of new educational institutions for children of different ages;
- construction of new and repair of old roads;
- etc.
The long-awaited peace will be the beginning of a new era for the Ukrainian nation, so we should expect a sharp increase in the price of square meters. The reasons for a sharp price jump can be:
- Ukraine's accession to the European Union, which will make our market more competitive and attractive to foreign investors;
- currency exchange rate growth;
- high level of inflation;
- problems with logistics;
- lack of specialists;
- shortage of quality materials.
Do not let temporary factors scare you, because they will be harbingers of the prosperity of the real estate market.
