What will happen to the real estate market in Ukraine?

19.01.2018 00:00
Real Estate Market Analysis | What will happen to the real estate market in Ukraine? The site "Today" has decided to understand whether there is such a cheap real estate in the country, and what to expect from this market in 2018. A sharp collapse in housing prices will not be

According to the latest reports of the National Bank of Ukraine, housing in Ukraine is sold practically at cost. The reason for all was the lack of demand. Large cities continue to build up residential complexes and new buildings. It is noted that over 9 months of last year in Ukraine, 21.4% more housing (6.8 million square meters of total area) was commissioned than in the same period in 2016. In general, for three quarters of 2017 in commissioned 84.4 thousand apartments.

Related article: Experts advise not to put off purchase of housing

NBU leads calculations, according to which the cost of real estate construction is slightly more than 12 thousand UAH, and next year it will grow to 14 340 UAH per square meter. But to raise prices for apartments is absolutely not reasonable because of a mass lack of demand.

So, the real estate market began to fall even during the crisis in 2008. In 2012, the situation stabilized slightly, but two years later the market again faced a record fall. Experts note that in 2014, prices for apartments in dollar terms fell by 2% a month. The main reasons were a sharp depreciation of the hryvnia, a drop in the purchasing power of citizens and an unstable situation in the east of the country.

"The rate of falling prices has significantly decreased in recent times, from 2-3% per month in 2014 to 0.5% in 2017. Accordingly, judging by the dynamics, 2018 will be a year of stability .But, rather a year of stability with a slight pull to very gradual decrease in prices, than to smooth growth, "- said the chairman of the committee of the Association of Real Estate Specialists of Ukraine Eduard Brazas.

According to him, the prerequisites for price increases are really absent, as predicted by the NBU. After all, the main catalyst for price increases may be an increase in demand, which is not particularly possible in 2018.

"Prices can grow only if there is a sharp increase in demand, because there are a lot of proposals now, roughly speaking, there are several apartments for one buyer." Prices will start to grow only if each of us finds an oil well, or if the mechanism of additional financing of the purchase will turn on, neither of which is threatening us in 2018. Therefore, there is no reason for price growth, "Brazas explained.

Chairman of the National Council of the Realtors' Chamber of Ukraine Viktor Nesin told the site "Today" that in 2017 in different segments of real estate there was a decline in prices by 10-15%, which, again, is due to the lack of money from the population. Moreover, even those people who have certain savings are not in a hurry to invest them in real estate because of the tense and unstable situation in Ukraine.

"The population today can only buy property by selling one of their apartments and buying another, or resettlement.If there was a mortgage, we would increase the number of buyers, at least among those people who have a stable wage. They are few, but they do exist, "Nesin said. The expert noted that in 2018 the same trend will continue as in the past, and prices will be applied, by about 10%, although there will not be a critical collapse.

"The trend in real estate prices will still be reduced in 2018. We can not say that there is no demand - we have an enormous demand, in my understanding, every second Ukrainian needs either improving or acquiring real estate .

But there is no financial opportunity, and in 2018 this possibility will not exactly appear. The collapse of prices will not happen either. Because the collapse will immediately cause demand. If there is a sharp collapse in prices, there is always someone who buys this property even with a view to resale, "the expert explains.

Nesin also said that if the dollar does not rise above 30 UAH, the primary market will be more active, here housing is usually cheaper than in the secondary market.

The cost of rent will increase

Despite the fact that prices for the purchase of real estate this year will remain stable, the rental price will continue to grow, which is due to high demand. Traditionally the peak time of rent increase will be August-September. It is then that the most active season is observed in Ukraine, when practically all the movements on the market occur.

"The rent is growing, prices have long gone to the hryvnia and, in principle, rent for inexpensive housing in 2016-2017 has grown, on the road housing it remains at a more stable level. I think that in 2018 there will be a slight increase, that demand is there, and the number of objects in rent does not increase, and this gives an opportunity to raise prices for it, "Brazas said.

The prices for rent grow only in those cities where there is a great demand for it. In such as: Kiev, Lviv, Odessa, Kharkov and the Dnieper. In other cities, rent will not go up. According to experts, for 2017, prices for rental of real estate have risen by 15-20%.

"For example, if in early 2017 we still met small one-room apartments at a price of 4 thousand UAH per month, then by the end of the year there was happiness if you find for 5 thousand UAH, the same continues in 2018, one-room, budget apartments creep up to 6 thousand UAH, "- summed up Nesin.

Earlier we wrote that experts predict a record low-cost housing in Kiev.

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