Should we expect a collapse in prices in the property market?

12.03.2014 01:00
Real Estate Market Analysis | Should we expect a collapse in prices in the property market? Until a few months ago, the situation on the real estate market in Kiev and Ukraine as a whole seemed stable. Now, however, the protracted political and economic crisis in the country changed the situation radically. Until a few months ago, the situation on the real estate market in Kiev and Ukraine as a whole seemed stable. Investors have shown great interest in the objects and projections inspired buyers only optimism. Now, however, the protracted political and economic crisis in the country changed the situation radically. Investors and ordinary buyers in turmoil - whether to invest in the purchase of real estate , or worth waiting for better times ?

Pent-up demand in the market

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Let us consider the situation that prevailed in the real estate market in Kiev , given the positions of the market before the crisis. In the fall of 2013, when Ukraine was prepared to sign an Association Agreement with the European Union , international experts assessed the market potential as high. Demand for housing has been stable , and many reputable international companies in their research forecasts given the obvious - demand should only continue to grow . Experts of EY, in his study of the market in the period stated on the expected growth of investment in real estate - polls showed that the majority of international investors regard the apartment in Kiev as a promising market for investment.

Optimistic forecasts were based on the intention of the investors in dozens of countries in Europe - the first time in recent years the real estate market in Kiev began to attract investors even in Italy and Spain, the countries that are going through a serious crisis on their own housing markets . Soon, however, the situation changed dramatically - the protracted political crisis has lowered the interest of investors to the market and the economic consequences that followed later , all postponed demand for a better day.

Fluctuations in the real estate market in Kiev

Reducing the demand for housing as well as the fall of the hryvnia , immediately affected the cost proposals in separate apartment complexes , offering buildings in Kiev. For example, some proposals have responded to the situation on the market increase in the cost , although some of the objects showed even lower prices for square footage . Whatever it was, but a number of residential complexes nevertheless raised the cost proposals of all classes , so the situation in the market pricing until uniform.

Few residential complexes were able to keep the value of their offerings on the market , and basically those were the largest developers . One of the largest complexes in the suburbs of the capital , RC " The Seagull" , continues to keep the cost of the proposals. This position may allow a situation that now has developed the real estate market in Kiev , retain customers and even attract new investors through a flexible position.

However, experts still believe that long to keep the cost of the proposals will not be able , even in such large residential complexes. Now flexible position can attract investors and allow buyers to keep the volume . However, this position may take a few players in the market , and inhibit the growth of housing prices after the crisis, developers likely will not be . Big players can afford to keep prices at the same level even at the expense of pricing policy , paying the price for a stable demand , reputation and new customers. But when the market stabilizes, prices have increased to their real level .

According to market experts , the question now is this - how long to wait to stabilize the situation in the market? Because after the stabilization of the situation demand will rise to previous volumes and prices for proposals hold no longer make any sense , and the big players will recoup for flexible pricing. Based on the trends in the market , it is quite obvious that investing in real estate to the crisis may well be a reasonable solution . Investors who invested in housing major players on the market can make good money in the near future , when the market stabilizes and cost proposals again go to "free floating" .

Such large residential complexes as "The Seagull" , buyers are willing to keep some time wise pricing, so investing in the property before completion of the crisis in the market can be a reasonable solution .

The most promising sector of the market

Kiev real estate market analysts expected trends of 2014 are especially appreciated the prospects of rental housing . Of course, the political and economic crisis impact on this sector of the market , but the demand will still remain high. At the same time , the pricing of rental housing market has not changed significantly even in response to recent events in the capital. In general , this year is expected to increase rents in Kyiv on 10-15%. Increase in the cost of rental housing has already called one of the main expected trends of the year , so it is quite obvious increase in investor interest in this sector of the market.

In general , investment in rental housing , as before, are long-term and very promising. Investment pays off in about 10 years, but in a crisis , which is now developed in the market , such long-term investments are particularly relevant . Real estate today is a more reliable object storage resources than even the largest banks . Therefore, if you invest the hryvnia - that uniquely housing , and renting it out this year promises great prospects .

The city center is now in touch with the latest developments loses demand , and increasingly it sorted out over large apartment complexes, offering new buildings in the Kiev region - namely, in the suburbs of the capital. Such housing attracts tenants primarily his own - larger complexes have developed their own new infrastructure. Residents have access to stores, pharmacies , parking, banks , and go to the city for business or leisure . Crafted experts such self-contained residential complexes in the suburbs as one of the most promising in the modern market of Kiev .

Residential investment in times of crisis - is always risky . However, experts now believe that instead of a collapse in prices in the market soon expect their growth. Large residential complexes that retain capital while prices for proposals therefore timely investment can be a wise investment and at the same time a reliable target for savings in an unstable market time.
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