In just two years - from 2008 to 2010-th - Ukrainian real estate market has changed beyond recognition. The cost of housing during the crisis fell by 20-50%, the number of deals dropped by almost one order of magnitude, dictates sellers replaced the dictates of buyers. By and large all these changes can be described in one sentence: housing from the speculative tool has become a commodity, perhaps the first time since 2004.
Related article: For a week the price of apartments in Kiev rose to $ 1842 per sq.m.In most regions, this process still continues - in 2011 the apartment as a whole will continue to become cheaper. Although not as rapidly as in 2009.
Champions of the fall
Absolute champion in the fall of 2009-2011. Kiev was: the average cost per square meter in the capital, compared to January of 2008 fell 48% - to $ 1792. Following are Vinnitsa ($ 700 per square. M, -41.7% for two years), Cherkassy ($ 750, -40.0%), Zaporozhye ($ 720, -40.0), Uzhgorod ($ 800 -38.5% ) and Lviv ($ 1240, -38.0%). Completing the top ten most depreciating Ukrainian city of Dnepropetrovsk ($ 1060, -37.6%), Kirovograd ($ 660, -37.1%), Zhitomir ($ 810, -36.7%) and Ivano-Frankovsk ($ 810 -36.2% ).
For all the dissimilarity of these settlements have in common: each of them in 2006-2008. at least once entered the top 10 most risen in price for the year of housing. As a result, the beginning of the crisis cost per square meter in Kiev came close to $ 3 thousand, accommodation in Lviv was worth nearly $ 2 thousand per square apartments in Dnepropetrovsk offered for sale at $ 1.7 thousand / sq. m. In the other regional centers of the cost of apartments falls within 1,1-1,3 $ thousand / sq. m
For Ukrainian regional centers middling price per square meter at $ 1,2 thousand, meant that the apartment house in the panel area of ??32 square meters. m in January of 2008, would cost the buyer approximately $ 40 thousand in the million cities like home - overlooking the industrial area or a concrete wall a residential box next door - cost is $ 55-65 thousand, and in Kiev - and at $ 90 -100 thousand for comparison: $ 130 thousand in roughly the same period, it was possible to buy an apartment almost three times larger area (80 square meters. m) overlooking the ocean in Panama City, or twice as much accommodation in Cyprus (60 square meters. m , $ 115 thousand), or an apartment on the Black Sea coast of Bulgaria (50 square meters. m, $ 47.5 million).
The main difference between Ukrainian real estate from the housing on the Pacific Ocean, the Mediterranean or Black Sea was not the view from the windows or clean air, and frankly speculative Ukrainian prices. At least one third of the objects before the crisis, was acquired by Ukrainians for resale: price increase on 30-40-60% per year making housing one of the most profitable investment instruments.
Especially when you consider that banks are willing to give loans to bail all the time rising in price of real estate: borrow money could be just under 13-15% per annum in exchange for up to several tens of years and with almost no down payment. Speculative buying pulled up the rest of the market. As a result, by early 2008, two thirds of housing purchased on credit, and buyers are not permitted and the idea that the market may be overheated.
Everything changed in the autumn of 2008, when the Ukrainian banks have lost access to cheap money long Western partners. Lending has been curtailed - and the real estate market collapsed a few months more than doubled. Moreover, most prices are down just where the most rapidly growing.
Second and third tier
If in Kiev, Lvov, Dnepropetrovsk or prices in the autumn of 2008, collapsed at 35-42%, then, for example, in Donetsk accommodation for the same period has fallen in price almost 9%. True, last year Donetsk property to catch up: to January 2010, the prices here have sunk 38% year to year. Nevertheless, up to 2008-2010. Donetsk (the current housing costs $ 1,090 per square meter. M, -35% since the beginning of the crisis) was in the group of cities, real estate, which in the past since August of 2008, two and a half years, fell by 25-35%.
Together with Donetsk in the same group entered exactly ($ 850 per square. M in January 2011, -34.6% over three years), Nikolaev ($ 810, -32.5%), Ternopil ($ 770, -32.5 %), Poltava ($ 850, -29.2%), Khmelnitsky ($ 850, -28.6%), Sumy ($ 750, -28.6%), Kharkiv ($ 870, -27.5%), Simferopol ($ 1050 , -27.1%) and Odessa ($ 1400, -26.3%).
The main difference between falling in this group of cities was the best, compared with Kiev and Lviv, the balance of supply and demand, formed by a variety of reasons. For example, because of traditionally high volumes of construction in Kharkiv prices in the million cities did not grow as rapidly as in other cities. Khmelnitsky - even in times of crisis - distinguished by the presence of effective demand, which is formed mostly by representatives of small and medium-sized businesses operating in the largest in Central Ukraine wholesale market.
In demand during the crisis and real estate in Odessa, but he played the main buyers are not local middle class, and immigrants from Russia. But apartments in Sumy, Ternopil, or not too fell for another reason. The fact that the fall of 2008 here and not had time to roll an "investment boom." As a result, housing is worth 1,5-2 times cheaper than in other areas: $ 750 and $ 700 per square, respectively. At an average price of $ 1.2 thousand in other regional cities.
Even less is cheaper apartments in Lutsk ($ 970 per square. M, falling from 2008 to -25.4%), Chernigov ($ 810, -22.9%), Kherson ($ 860, -21.8%), Sevastopol ($ 1100 , -21.4%), Lugansk ($ 810, -22.9%) and Chernivtsi ($ 900, -11.8%). Demand in these cities about the proposal corresponded to the beginning of the crisis - such as supply and demand balance remains there now.
Before the crisis, in response to accusations of artificially inflating prices, most realtors often said that housing "is just enough for him to pay." Situation 2009-2010. fully confirmed the correctness of this assertion. However, to the bemusement of themselves Realtors.
Until 2008, the rise in prices on the Ukrainian real estate market have formed labor migration, the level of income in a particular city and lending. After two years with a little after the crisis began, none of these factors influence the value is not provided. Migrant workers from the regions are limited to renting - buy even half the depreciating housing unaffordable. Real income has declined significantly. As for lending, the current rates (17-18% pa in UAH) and the first payment at the level of 40-50% of the cost of housing discourages almost all potential borrowers. The only exception to this rule - part-exchange transactions when the bank for a loan becomes owner of the apartment, which lacks a small amount to improve housing conditions. On them, according to observations of Realtors, the lion's share of transactions in 2009-2010.
Lack of credit is completely eliminated the speculative component, which was the result of a fall in prices to about the level of construction costs. So, for the majority of regional centers indirect cost of construction of a square housing in an apartment house is 5-5,5 thousand UAH, or $ 630-690. This is the cost of construction without finishing work, which cost anywhere from $ 60 to $ 200 per square meter depending on the region, the level of repairs and requests of the owner. Accordingly, in most provincial towns square meter is $ 700-900. And it is quite "fair" price.
Nevertheless, in 2011, and in 2012 will decline and it is. The fact is that even with the return of long-cheap mortgages wanting to use it will be an order of magnitude smaller than in 2008. The main beneficiaries of housing loans to the crisis in Ukraine appeared small and medium businesses, the proceeds of which now have fallen so that the majority of its representatives can not even afford the monthly mortgage payment, not to mention the first installment.