Price trends

The real estate market is a living organism that changes, adapts, and suffers under the influence of crises.

To be honest, the real estate market is a bit tough these days. If construction is actively underway in your city, it is more likely the completion of already started facilities.

Today, companies do not start new projects, which is why in the future, unfortunately, we will face a significant shortage of apartments. In the long term, there will be no new high-quality objects and there will be a price jump in ready-made houses.

In fact, it is difficult to predict when the market will operate at even half capacity. It is also not entirely clear what he will be like after victory. Everything depends on the duration of the war, on the destruction that Ukraine may still experience and in which borders it will remain, in the end.

Will customer demands change?

Trends do not undergo radical changes. The client’s request will be the same as before the war: compact quarters or mixed buildings of different storeys, where, in addition to housing, all the necessary service infrastructure is provided (grocery retail, coffee shops, pharmacies, children’s educational institutions and spaces for development and entertainment, offices, etc.), recreation areas, promenades, children’s and sports grounds, safe courtyards without cars, etc.

Of course, the war and its consequences will affect the buyer’s request. In addition to the above-mentioned amenities, the client will pay attention to the safety of the complex, in particular, the presence of underground parking lots, which must be adapted to the functions of a bomb shelter. In my opinion, this is not a trend, but our reality. We have to be ready for anything.

There will also be a lot of attention to the inclusiveness of housing and infrastructure: a comfortable neighborhood, comfortable access to apartments, etc. This has been talked about for a long time, but after the war, inclusiveness and barrier-freeness will be even more relevant.

By the way, 90% of people who can buy an apartment today want ready-made housing or something that will be put into operation in 2022. Of course, far fewer buyers are willing to wait until the end of 2023. And that’s okay. After all, in times of war, every client wants to be sure of the reliability of investing their funds.

What will happen to the cost per square meter

The price of apartments has already increased, in particular, in hryvnia equivalent. The average price per square meter is higher than in February. And this is normal in a country in which there is a war. In the post-war period, the growth trend will continue.

After all, the price is directly affected by: the purchasing mood of customers, the weakening of the hryvnia against the dollar, the pace of construction recovery and the remoteness of the region from hostilities.

And if you add to all that the rising cost of building materials and complicated logistics, the price per square meter for new construction projects will increase significantly.

But now I can point out that since the objects in which the sale is carried out are mostly not new, but were started last year, therefore the increase in the cost of materials today does not have such an aggressive effect on the price. That is, the rule “Cash is the king” is more relevant today than ever in the real estate market.

Price, demand and supply

The issue of housing will be particularly acute after Ukraine’s victory in the war. A significant slowdown in the pace of construction, the lack of new facilities, albeit weak demand, will lead to a certain shortage of high-quality residential projects, and, accordingly, a shortage of comfortable and liquid residential real estate on the market.

After winning with the growth of demand, due to the large number of delayed planned deals, forced deals to improve living conditions and as an investment, developers will not be able to quickly satisfy all the needs of buyers, since the cycle of preparing and bringing the object to the market lasts 12-24 months. Together with the increase in the price of materials, all this will lead to a significant increase in prices.

Ukraine is definitely expecting a decrease in the purchasing power of the population and, accordingly, a decrease in opportunities to purchase real estate. At the same time, in connection with the destruction of the housing stock as a result of the war, hundreds of thousands of Ukrainians already need new housing.

But, unfortunately, they cannot afford to buy a home right now, not to mention the rising prices.

We will get a situation in which the state and local self-government will have to intervene. Here we are talking about communal housing, which will belong to the community of the city, and which can be leased on a long-term basis specifically to vulnerable sections of the population, IDPs and those groups of people who need it, but cannot afford to buy it.

In this way, cities will receive a market tool to influence the rental market by regulating rental prices and, to some extent, the cost of primary housing.

City administrations will be able to purchase such communal square meters on the already existing market, attracting financing from state guarantees, international grants, EBRD, etc., and this will give a certain opportunity to revive the market itself.

The second block, which requires the participation of the state, is mortgages or housing leasing. Now we have isolated similar programs in the youth credit fund, which work quite successfully, although they have a big lack of funding from the cities and the government.