Market Overview cottage construction in Ukraine

02.04.2008 00:00
Real Estate Market Analysis | Market Overview cottage construction in Ukraine Cottage real estate market of Ukraine as yet little studied, but interest in this subject in recent years is growing. It is no coincidence, since the buyer against a background of rising prices for apartments are increasingly beginning to think about buying a house in a suburban area. And this can not fail to see local investors and developers.
The desire of our politicians to bring Ukraine to the list of developed European countries do not always coincide with the desire of local builders learn from European colleagues. In Europe, up to 30% of citizens living in the cottage, and for them it is not luxury housing, it is the norm of the middle class. The rate of cottage construction in Ukraine totally dependent on the level of profitability of the population and the banking system lending. While the development of organized cottage construction can speak only in cities over one million people, where the level of security of the population is growing steadily, which in turn attracted to the market in the domestic investor.
But when the investor decides to enter his project in this segment of the real estate market, it faces a lot of problems, not only with the "misunderstanding" of officials. Today in Ukraine there is no such legal concepts as "cottage" and "cottage community". The land is used for construction and maintenance of residential homes. A moratorium on the alienation of agricultural lands deprives the investor opportunities for land use of large size, which, strictly speaking, not suitable for use or unproductive in agriculture. In addition, there is a problem of long term changes in purpose of land - these are additional costs for the investor. So, first of all, it is necessary to resolve the Ukrainian legislation, which will stimulate domestic and foreign investors to invest money in the development of organized cottage building and create a healthy competition. Meanwhile, about 60% of towns are built in a shortage of funds, with savings on advertising, no publicity.
On the Ukrainian market of cottage building all begins not with an interesting, original project, and with the acquisition of affordable land. It is based construction project. This difference between our market from the west, European. At the European property market construction begins with site selection and market research of consumer demand for homes of any type. Local developers are also repelled from the acquired land and built a cottage footage as possible - in order to gain as much revenue from the sale of square meters.
However, we can understand and local investors and developers. Today, the primary market of cottage townships of investors with idle funds and buying up land on the secondary market. The process of acquiring land in the primary market is complex and expensive. To do this, land privatization, to change its designated purpose, the zones. And this involves time and additional costs. On the one only the consent of the local administration or the Board on the development of right of way takes at least a month. And this is followed by coordination of the location of the object, then there are at least 3 months. Further alignment of your question dealt with in a district or oblast state administration with the right of seizure of your land. By itself, the question arises: Is this interesting option to the investor? So, first of all, you should change the process of adjustment, to simplify it, make it more interesting to the investor, rather than official. Openness of Ukrainian legislation will come into the market to foreign competitors, reorienting the position of developers with cottages elite category at a mass consumer.
The Western investors should not question: Does the Ukrainian market of cottage building. The question is, when they allow themselves to make this step. At present, foreign companies, mainly working in the financial sector, in mechanical engineering and metallurgical industry. The main stream of investments coming from EU countries and Russia, often - through their representatives in Russia. The most attractive in this respect the German capital. In 2005-2006, started an investment boom in the Ukrainian real estate market, which is associated with the development of market infrastructure. To the boom came and suburban real estate market, it is necessary to propose investment projects to build cottage with a serious marketing research and management qualifications. To date, the deficit of interesting and thoughtful projects.
The Ukrainian market of cottage townships can be divided into "profitable" and "solvent" regions. In Kiev, Dnipropetrovsk, Kharkiv, cottage villages, usually mastered by local people, and in the resort and tourist areas, such as the Crimea and the Carpathian Mountains, are attractive, especially for visitors from other areas of the Ukrainians and foreigners. Total demand in all regional centers is almost identical. Demand has increased thrice. But the proposals cottage townships, still, very few, so basically bought up houses in the towns of spontaneous development. The growth trend of building a cottage village there is organized so far only in major regional centers such as Kiev, Kharkov, Dnepropetrovsk, Odessa, Donetsk, Lviv. But here, it may be noted particularly the eastern and western regions of Ukraine: the dynamics of the construction of cottage villages in the west is much lower than in the east.
The potential of this segment of real estate is huge and in Western Ukraine, and Eastern. But the problems are the same everywhere - the openness of the land question and the orientation of local investors in the elite, but it is only about 10% of the population. Our view coincides with that of a number of skilled experts in the country real estate: signs should be changed to mass consumers, the so-called middle class, which is now taking shape, and formed their needs for quality suburban housing. Moreover, the prices of apartments in major cities themselves are pushing buyers move into homes. According to various estimates, up to 50% of Ukrainian buyers willing to buy a house instead of an apartment outside the city, provided convenient transport interchanges and the availability of required service in this village. The cost of building a house on their own, according to experts, an average of 500 at. f. / sq. m behind the brick house, with 450. f. / sq. m - for the wood. Village House buyer prefers cottage in the organized town with infrastructure, the appropriate status of the buyer. Moreover, if domestic bankers will cut interest rates on mortgage loans suburban housing below 19% in UAH, it will increase the purchasing activity of the urban population. The optimal credit period - 10-15 years. Now 80% of borrowers trying to repay the loan ahead of schedule, to avoid undesirable spending.
An important factor in forming the growth of consumer demand for cottage property in Ukraine is an indicator of growth in the value of apartments in the primary and secondary markets for residential real estate. As housing prices in condominiums, according to forecasts of qualified professionals will continue to slow growth, the buyer will increasingly prefer suburban housing, treating it not as a country house, namely as a place of permanent residence.
Indicative in this respect market suburban housing in the capital. Cottage construction near Kiev is now under active saturation new projects cottage townships. The reason for this, in many respects, has been a sharp rise in housing prices in Kiev itself, plus a quick return on investment and the lack of tough competition. All this gave rise to market cottage construction of a number of investors and developers. An interest in this segment of the market in Russian and Spanish investors, who already have considerable experience of successful investment projects. In addressing the above issues of concern of foreign investors could double.
Most of the proposals have built settlements on the western and southern parts of the capital's suburbs. The leader in terms of construction is Zhitomirske direction. The second highest number of housing developments are Obukhov, Odessa and Boryspilske direction. 53% of Kyiv residents are considering a country house as an alternative to the metropolis, and 20-25% - as an additional option for housing in the city.
In 2005, the market offers no specific changes in the absence of delivered objects. The commissioning dates for construction of cottage settlements will have a few waves. The first begins with the date in mid-late 2006, the following objects: "Sun City», «Montana Village», «Zoloche", "Three Rivers", "Cherry City". The second - the middle of 2007 - "Kalynovyi town", "New Bogdanovka", "Petrushka", "Clear Zori". The third - the end of 2008 and beginning of 2009. - "Michael's Garden", "Yasnoozernoe. Of the new projects as the most interesting things you can make cottage village «Kiev Country Club», which is located at 58 km from Kiev to Zhitomir direction. This is a project company Investore Group.
Today, for obvious reasons, the demand for primary market of cottage settlements remains latent intensity. The builder wants to dictate its terms of pricing in the market where consumer rights. Because of the ineffectiveness of such policies seller starts to cheat. This is reflected in the maximum closure of markets, operators refuse to comment on the market. None of the advertisements cottage settlements are not specified prices per square meter. Builders tend to generate interest and to achieve this closeness of personal contact with the consumer.
In the segment of expensive suburban real estate by number of nominations in the lead Obukhov and Zhytomyr direction. They accounted for 55% of the total requests. In second place Boryspilske, whose share is 25%. Also popular areas such as Odessa, Vyshgorodskiy - 15%. The combined share of other areas in the overall structure of demand is 5%. The main part of town real estate buyers wishing to purchase a house located within 15-25 km from Kiev. The share of demand for homes with the remoteness of more than 30 km from Kiev in the total demand does not exceed 10%. Most customers (80%) asked the objects area of 200-250 square meters. meters in the townships with the already established infrastructure in the immediate vicinity of Kiev. Aggregate demand for suburban cottage accommodation in the coming years will be about 500 thousand square meters. meters per year.
The situation in Kiev suburban real estate market can compare with the Moscow market two or three years ago. Unmet demand for objects of the country estate can predict the rise in prices in 2006-2007. Will begin active development of a country estate development and market entry of many new objects of cottage construction.
In 2005, price growth in the construction of cottage settlements amounted to about 5% per month. This resulted in a rise in prices for land by 10%. We note the tendency of operators of the primary market cottage townships equalize their pricing policy on capital construction companies, whose average price for 1 square. m is 1 thousand have. e. In some locations, there was an increase in the price of houses. Understatement of the price range, oscillating between 500 and 900 have. e. sq. m, due to obscure the vision of developer deadlines object, the end of construction scheduled for late 2007 or early 2009.
According to the Association of Realtors of Ukraine, in 2006-2007 under construction today cottage villages in the Obukhov, Zhitomir and Boryspil directions in operation will be introduced immediately, seven of them. The total land size of these objects will be 100 hectares of land, which will accommodate up to 200 thousand square meters. m cottages and townhouses. Mid 2008 - early 2009 will please the market not only put into operation ten other cottage communities, but also new projects. These settlements, according to realtors, will be located in the Zhytomyr direction, near Brovary in Zazimya (about Gums), in the Odessa area (near Hlepchi), in Kryukovshchina.
Recently, construction companies, which previously worked only on the capital market, began to actively promote regional construction. This is due both to the complexity of the procedure of building in the capital and interest of the regionals in a modern and quality accommodation. In addition, in regions near the capital's builders are much more opportunities for integrated development of large areas. It became clear that the regional market potential is ready - there is money, there is a desire, but there are only suggestions. Here are the builders and began to actively explore and develop this market. We can say that the most serious obstacle to the development of construction in the regions was the mentality. Local companies were afraid to make a long first step. They're not owned technology cliches schemes, as builders of Kiev, in which these schemes have already been perfected long ago, so the mutual interest of builders and investors would take too long to accumulate, and then there was a qualitative leap. There is a demand - should be a supply. Began to appear proposal, and found that at home, even far from the best quality, bought. And these homes, there are still only in draft, too, began to sell, that is the financial mechanism appeared to raise funds. The first really modern quality projects have been implemented in cities over one million people - Dnepropetrovsk, Kharkov, Odessa. There are houses that the quality is worse than the capital.
Demand was born not only because it appeared that the local elite, who wanted not only to own real estate in Kiev, but also to live in good conditions at home. In this wealthy elite, in the regions appeared a middle class - well-paid professionals. It began with the industrial cities, where local enterprises began to attract foreign managers. Immediately the question arose: where they live? And it was four years ago. But today this problem is much broader - how to provide housing for middle managerial staff? Wages have risen, increased demands of the people, there is a natural process of improving the quality of life.
And the Kiev companies interested in the regions appeared on the principle of water movement, which, as we know, always flows to where the lighter. And the construction company. If I spend in Kiev to receive permits for 2 years and the turnover of my capital is long and in the region I in the normal attitude of the authorities to resolve all issues within 2 months, then yes, I find it very interesting. I was then easier to get their profits, though not on such a large volume, but the turnover of capital is much higher.
In the regions to obtain permits easier, because the authorities are more centralized. In Kiev, there are many organizations and agencies that make decisions. And before you start building, you must collect 240 signatures. And in the provincial or district center makes all the decisions actually one person. If he likes your project and you agree in principle - it will give the command, and the next you have no problems. Local governments interested in attracting builders because it is an investment that the city's development, this influx of people in this business development is the development of infrastructure - from roads and finishing shops and restaurants. That is, a flag, which any governor or the mayor could always proudly waving from any platform. This is something that he can safely burn itself into an asset.

Victor Denezhuk, head of investment consulting ISK FinkomStroy "
www.zagorodna.com
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