Property prices in Ukraine in 2018: the cost of housing( primary and secondary)
- 18 Nov 14:15
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Current economic conditions in Ukraine are characterized by a protracted crisis, instability of the national currency and unrest in the banking system. That is why the issues related to the acquisition of housing are more and more concerned with citizens who seek to protect their savings. In, unpredictable inflation, money stored "under the pillow" quickly lose its value, and regular rumors of bank closures and non-payment of deposits do not allow trusting accumulated by these financial institutions.
But the apartment remains a proven way of investing money - even if you have a place to live, new square meters can be leased, getting a monthly premium to income. True, the building boom of pre-crisis times was accompanied not only by the constant growth of new buildings, but also by the high prices for housing, so that not everyone could afford an apartment.
In the wake of the 2015-2016 crisis, many builders were waiting for an unpleasant surprise. They had to accept the fall in prices for built-in square meters, and people who have a financial reserve in foreign currency, were able to profitably buy real estate. But today, experts are increasingly saying that the decline in housing prices will soon end, and the market will stabilize in the near future. Let's find out whether the trend for cheap real estate will persist in 2018, is it worth a hurry to not get into the wave of a new rise in prices!
The History of the Ukrainian Housing Market
Before discussing what forecasts are provided by analysts and real estate market experts in 2018, let's look at how the situation developed earlier. The first bells of the crisis sounded on the residential market in 2015, when the price per square meter fell by 1.5-2% every month.
The biggest fall was reflected in metropolitan sellers - by the end of the year, Kiev apartments sold on the secondary market, lost in value to 20%, and the average price per square was fixed at 1290.e. The situation in the regions seemed less catastrophic: Kherson real estate fell 1%( to 591 dollars), Lviv - by 1.4%( to 1049 dollars), Odessa - by 2.8%( up to 934 dollars), Kharkov - by 3,3%( up to 692 dollars), Dnieper - by 4.0%( up to 663 dollars), Ivano-Frankivsk - by 3.5%( up to 525 dollars).
As a result, Kyiv's price for a one-room apartment on average reached 40.3 thousand dollars, and Lviv and Odessa offered such housing for 30.5-31.5 thousand dollars. For quite clear reasons, the largest fall in prices was recorded on the Lugansk and Donetsk markets - an apartment with one room could be purchased for 9.0-10.5 thousand dollars. All this made the participants of the real estate market think, which, first of all, belong to the developers, owners of secondary real estate.
Developers began to freeze construction or build houses only when they received 100% of the required investment from the population, and secondary owners began to remove objects from sale one by one, deciding to wait for "turbulent" times. Experts say that if in the first half of 2015 the real estate market was about one-third of the country's housing stock, after a sharp jump in the exchange rate from 17 to 30 hryvnia per dollar, the housing offer only covered 5% of existing secondary market objects.
In 2015-2016, housing in Ukraine reached a record level of availability of
In 2016, according to expert estimates, the fall in property prices amounted to an average of 3 to 5% per year. For example, in the first half of the year, the Kiev housing market could find apartments at a price from 950 to 1050 dollars per square meter, and at the end of the year you would easily find an object for purchase at a cost of $ 850 per square. The situation on the market also aggravated by the fact that the demand for small demand in the last 5-7 years only increased - all regions and large cities covered a real construction boom.
If you analyze prices in 2017, then they are comparable to last year's figures. If in 2016 in Kiev it was possible to buy an apartment, having paid 22.6 thousand hryvnia for the square of "primary", then in 2017 this figure amounted to 22.5 thousand hryvnia. The minimum price is fixed at 14.5-14.9 thousand hryvnia - such a new building can be found in the Desniansky district of the capital. Traditionally high prices characterize the real estate market in Podolsky, Shevchenko and Pechersk districts - where the price of a square reaches 47.5 thousand hryvnia.
On the issue of new building
According to the information provided by the specialists of M Consulting Group, in 2016, 10 million square meters of new real estate was thrown on the Ukrainian market. Approximately the same number of meters was put into operation in 2017.
From the total volume of the largest of the primary came to Kiev( 12% of the total metropolitan area) and the area adjacent to the capital( about 21%).Today, here you can buy apartments in more than six hundred new buildings. The second and third places were divided between the Lviv and Odessa markets - here in 2017 it is possible to buy housing in 201 and 151 new houses. Among the outsiders are Zaporozhye( 15 new buildings), Sumy( 13 new buildings) and Chernihiv( total 7 new buildings).
By the way, the desire of developers to reduce their housing costs has led to the fact that many new homes are problematic. Only in the capital there are 60 new buildings erected in violation of the norms of urban planning, which now can not be put into operation. The rate of unfinished houses remains critical - only in Kiev there are about hundreds of such objects, and if the purchasing power of Ukrainians is not restored, experts predict an increase in the number of problem homes.
However, this situation characterizes not only the capital market - in many areas of the country, investors who failed to enter the new building within the scheduled time, arrange protest actions. If we talk about the proposals for apartments in the new building, then in 2017 only in the capital, published ads about the sale of 56 thousand apartments, but actually delivered from them there are only 36200 objects.
Forecasts for 2018
Housing market projections are controversial. Most experts say that in 2018, the real estate market will revive. Starting from January, the growth of housing prices will be accompanied by insignificant dynamics - the forecast suggests a possible increase of 5.5-6.5%, but from the second half of 2018 it is quite possible to talk about growth in the forecast 10-12%.
According to Victor Nesin, who holds the position of chairman of the National Council of the Realtor Chamber of Ukraine, in 2018 it is necessary to prepare for the growth of housing prices. Nesin believes that prices may return to the level observed in pre-crisis times. This conclusion is explained by several factors: firstly, the real estate market of Ukraine is increasingly interested in foreign investors, and secondly, the expert expects a gradual increase in the welfare of the local population, which will lead to a revival in demand in the market.
Experts from the M Consulting Group believe that the market will not be able to recover to the pre-crisis level - by the end of 2017 they predict a drop in prices by 12-15% from the current level. Periodic recovery from analysts' customers is called short-term. In their opinion, only the well-off settlers who have moved to big cities from the Crimean peninsula, from Luhansk and Donetsk oblasts spur the hype. For example, in Kiev officially registered about 170 thousand citizens belonging to this category.
According to experts, the demand for housing is explained not by the increase in the welfare of Ukrainians, but by the transfer of wealthy families from Crimea, Lugansk and Donetsk.
The second factor contributing to the increase in demand for housing - the purchase of real estate by Ukrainians who took their Savings Privat Bank after its nationalization. However, this is not a long-term source of money. Despite attractive promotions and a discount program, people investing in housing are getting smaller every year. Also interesting are the data on the cost of construction of new objects in the housing market in 2018, issued by the Ministry of Regional Development.
After analyzing them, one can estimate how much it will cost buyers ready housing - you only need to add 40-70% to the specified value. Specific figures, of course, depend on the prestige of the district and the arrangement of housing. The corresponding order has already been published on the official website of the department, and from 01.01.2018 it will come into force. According to this document, the average price for the construction of a square meter of housing will be 12.17 thousand UAH.If you look at the situation in the regions, then it looks like:
- will cost the most expensive housing construction in the capital - UAH 14.34 thousand for 1 m2;
- the minimum cost of apartments - in Transcarpathia, where the construction of one meter is estimated at 10.58 thousand hryvnia;
- is not very different indicators of Kirovograd region - 10.6 thousand hryvnia per square;
- in Zhytomyr oblast, the construction of a new housing estate, according to the calculations of the department, will cost 10,72 thousand hryvnias;Developers spend $ 10.96 thousand in the Ivano-Frankivsk oblast's
- in Poltava and Kherson - about 11.16 thousand hryvnias;
- in Chernivtsi region, the construction of a square meter of new buildings in 2018 will cost 11.28 thousand hryvnias;
- in Sumy oblast costs per square is 11.42 thousand hryvnias;
- in the Ternopil region - 11.44 thousand hryvnias;
- in Zaporozhye, Chernihiv, Vinnytsia regions - approximately 11.66 thousand UAH per square;
- in Odesa and Dnipropetrovsk regions costing one square meter of housing costs 11.85 thousand hryvnias;
- in Mykolaiv region, the builder must invest about 11.9 thousand hryvnias per square meter of housing under construction;
- in Lviv, Khmelnytsky and Cherkasy regions - for 12.0 thousand hryvnias;
- in the Kiev region, the construction of a square of new buildings will cost 12.27 thousand hryvnias;
- in the Rivne and Kharkiv regions - in the amount of 12.36 to 12.79 thousand hryvnia.
Residential market analysts believe that in 2018, demand for high-class apartments and smart apartments will be used, because such housing is the least costly option for further property retention and utilities payment. In addition, the cost of such apartments varies within 20-45 thousand dollars, depending on the region.
Experienced developers recommend that Ukrainians do not try to save, buying apartments at a low cost. The increase in prices for building materials has led to an increase in the cost of houses, so that the low price( around $ 500 per square meter in the capital) warns of the presence of fabrication. Most likely, the developer stingled on quality materials or implemented construction in violation of technical regulations.
Be careful - if the price of housing is lower than the average market, it is reduced with a violation of construction norms or from poor-quality building materials!
According to Denis Morozov, managing director of sales department of KANDevelopment, about 90% of developers depend on investment investments by buyers. In the current situation, when the supply in the housing market exceeds consumer demand, the builders will either reduce the cost by lowering the quality indicators or work for some time at a loss in order to be able to complete and sell the reduced objects. For serious developers, this step may sound justifiable.
The construction market is now divided between several large players, and deteriorating reputation and downgrading can play a crucial role. Developers who can not develop under current conditions risk leaving the market. New realities forced developers to provide installments, and it can be arranged not only to the end of construction work, but also for six months after settling in the house. Such a sentence is often used by Ukrainians who want to buy an apartment of a large area.
About preferential housing lease
Innovation in 2018 may become a new state program that regulates the leasing of new buildings. You can buy an apartment without an initial cash payment that is not suitable for most Ukrainians. Already settled in a new building, its owners will deduct monthly fees as payments. An experiment with leasing real estate will be conducted in the capital, and if it demonstrates the effectiveness of the proposed program, it will spread to other regions of the country.
The leasing program will be implemented through the creation of a state-owned company that will buy out apartments from developers to then lease them to interested citizens. According to preliminary calculations, housing with an area of about 50 squares can be leased for 20 years, monthly paying a contribution of about 5200-5500 hryvnia. It is planned that by the end of 2017, 30,000 apartments in Kiev and the region will be redeemed.
Leveraged Leasing Program Help Young Families Receive Housing
Participants of the ATO can take part in the project, according to statistics, in the capital, there are about 2700 people. They will be able to take shelter under the leasing program for 20 years at 15.3% per annum. The draft specifies that if a person changes his mind to buy an apartment, at any moment, he may not just leave it, but also get a certain percentage of the contributions paid.
The second in line are civil servants, and then the leasing program can spread to other Ukrainians. The only existing restriction is the age of the participant - it may become a person who has not yet turned 50.