Association with the EU will boost the real estate market in Ukraine

22.03.2014 00:45
Real Estate Market Analysis |  Association with the EU will boost the real estate market in Ukraine "The real estate market - it's a mirror image of the economic and political situation in the country," - says Victor Nesin, chairman of the National Council of Realtor Chamber of Ukraine.
Today Ukraine will sign the first part of the agreement on association with the EU. And though it will only be a political agreement , it will give hope to many sectors of our economy to the gradual stabilization of the situation.

Just a few months ago, experts predicted its real estate market stagnation for another 2-3 years , reducing the potential purchasing power of the order of 5-10 % of the population and, consequently , reducing the cost of housing up to 15% . After the failure at the last moment of the Yanukovych government from signing the documents of the association market in general crestfallen . The main problems of the time called the almost complete lack of competition in connection with the corruption going wild in all key sectors of the economy , and also the pursuit of market players get mega- profits for implementation often substandard product.

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Now the situation is , hopefully, has changed dramatically . "We should understand - says Victor Nesin , - that the market will not change overnight from signing any agreements with the European Union . Especially because it now goes only political agreements. But we have a prospect that European investors are now at least will look in our direction . "

This means that in a sufficiently foreseeable future ( called optimists just a year and a half after the signing of an economic agreement ) domestic real estate market will get a significant boost in the form of call to Ukraine foreign investor. Actually, it is the lack of investment , according to market players, is today one of the major factors hampering the development of the industry.

" In addition to direct investments in real estate (primarily , of course, construction ), which , by the way , we will see a little later , in the autumn of this year, we can expect the first payment receipts under international treaties of Ukraine, and this will mean stabilization and push for economic growth as a whole " , - says the president of the Association of Realtors Sergei Sinister . For Realtors , this will mean the likely emergence of new companies and their employees, who may require , as a minimum, office space and apartments .

Accordingly, all this will affect the formation of the new pricing policy real estate market. Prices will rise . However , experts say that the average man does not follow this fear. " Look at London , New York , and other world capitals - said Nesin . - There's a very expensive real estate ( from 7-15 thousand euros per square meter - approx. Ed.) , And the local population is satisfied, because their own income is also constantly growing. "

But the particular negative consequences for the real estate market by signing the EU Association experts do not predict . Although this industry is very segmented ( office, hotel real estate, housing , etc.) , so it is likely that in some segments may experience some temporary - it emphasize how optimists and their opponents - complexity. For example, the kind that were in the Baltic States after accession to the EU. There's real estate market and, above all , rent first miserably collapsed - people had to give their property on almost 2 euros per square meter. m However, the situation quickly enough not only stabilized, but there has been a significant positive trend , which we can see now.

It is also likely that the affected players , accustomed to " fighting without rules" - Europe as a domestic buyer will not forgive : nobody will buy more low-quality products at inflated prices. Especially it touches the building materials manufacturers and developers . That is actually going to happen kind of " redistribution of the market " : dishonest players will be forced to shut down its operations due to lack of competitiveness , some smaller companies can not really compete with the world coming to market monsters , and they will have to relocate to regional hinterland with subsequent absorption or even liquidation.

But the secondary housing market such problems will likely not be affected , because it is almost independent of external factors. Here during sales transactions do not need to consider the cost of supplies and building materials , the state of housing priced in the first place. In fact, the only secondary market regardless of the currency exchange rate , though , according to experts , and not too much. It is therefore considered that the real estate - the best investment.

Thus , the association with the EU , in fact, the real estate market in Ukraine will bring some long-overdue modernization , it will give impetus to further development and redistribute the forces on the basis of European quality products and services. And if someone does not like it , then most likely , the majority of honest players and end-users will remain a significant benefit.
Content tags: Housing Market Forecast
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