Real estate prices will fall/Unsplash
Over 6 million people were forced to leave Ukraine due to Russian aggression. In addition, many lost their homes, because some cities were completely destroyed by the invaders, while others were badly damaged by missile attacks. Of course, all this has affected the real estate market.
Now Ukrainians have again begun to massively look for housing, but the offers significantly exceed demand. About what will happen to real estate prices in the near future – the channel 24 website asked experts.
What about real estate in Ukraine
< strong>Bogdan Slutsky, financial and economic observer, noted that the demand for housing purchases will depend on the situation in Ukraine. Since the degree of threat is different in different areas, both demand and supply will not be the same.
For example, now the most interesting for buyers is housing in the western regions of Ukraine. Accordingly, prices there have increased by at least 20 – 30% (for rent – in some cases even at times) compared to the cost before the aggressor's full-scale invasion.
If we say about such cities as Dnipro or Odessa, then the demand is smaller, therefore, the prices for rent or sale will not grow in the near future. Moreover, in some cases there will be a trend towards a decrease in the cost of about 10-20%, says Slutsky.
He added that, speaking in general, the war broke the trend for a significant increase in real estate prices observed during 2021. And the greatest demand now is for apartments that are ready to move in, because it is quite difficult to make repairs for many reasons now.
Analysts OLX Real Estateexplained that due to hostilities and forced relocation to relatively safe regions, Ukrainians are 1.5 times more likely to look for rented housing. If a day before the start of the war, 1.6 million searches were made on the resource for rent, now this number has grown to 2.7 million searches.
There is a high probability of quickly finding free square meters in the Dnepropetrovsk region. Since the beginning of the war, the number of apartments for rent in the region has grown by almost 11%, which is noticeable by the number of ads on olx. However, the price has increased slightly. Now for rented housing you have to pay an average of more than 7 thousand hryvnia. Approximately the same average monthly rent is requested in the Ivano-Frankivsk and Poltava regions, but in the Cherkasy region, the price of living per month will cost a little more than 6 thousand hryvnia, experts noted.
They also added that in the western regions , given the increase in demand, prices on the contrary rose. In Ivano-Frankivsk, a monthly rent for a one-room apartment in May costs UAH 8,776, a two-room apartment costs UAH 11,702, and a three-room apartment costs UAH 17,553.
In Khmelnitsky, offers for renting apartments are more affordable than in other western regions: one-room housing will cost 6,000 hryvnia per month, two-room housing – 8,000 hryvnia, and for three-room houses, you need to pay an average of 12,000 hryvnia per month. Similar prices in Cherkasy.
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Housing prices are rising in Western Ukraine/Photo by Unsplash
What will happen to real estate prices in Kyiv
Yuri Pita, President of the Association of Real Estate Specialists (Realtors) of Ukraine, noted that, of course, the housing rental market in Kyiv has already recovered, and we see that supply is many times higher than demand, so prices have decreased by 30 – 50%.
Regarding the purchase and sale of residential real estate after the opening of the register, in most cases, advance transactions are concluded in the pre-war period, and there are also isolated cases of contracts for objects that were put up for sale after the opening of the register.
In the short term, supply will exceed demand, which may lead to a decrease in the value of real estate in relation to the pre-war period by 20-30%. Demand for rent will gradually increase due to immigrants, the demand for purchase will also recover, but we do not expect a resumption to the pre-war period. Again, a lot will depend on the situation at the front,” Pita explained.
He added that economy-class housing worth up to $50,000 will be in the greatest demand for purchase. Also popular will be 1-2 room apartments in finished new buildings.
Anatoly Topal, an expert of the DOM.RIA Analytical Center, assured that demand will grow, because people are returning, internally displaced persons from hot zones are coming, business is starting to work.
If the situation around Kyiv does not worsen, the trend will continue. Specialists expect that by the end of July – beginning of August the demand for rent will increase by 35 – 40%. But at the same time there will be no more than 40% of the level of last year. Two-room apartments along metro lines will be popular.
In Kyiv, housing supply exceeds demand/Photo by Unsplash< /p>
The value of real deals may change after the end of the war. After the war, rental prices will rise by 15 – 20% immediately. Also, pricing is influenced by the inflation component and fluctuations in exchange rates. In the event of rising inflation, in the event of a sharp rise in the exchange rate, many landlords will try to raise prices. But the main factor will be the income level of the population. Also, rising prices will constrain the growth of supply. By autumn, supply is expected to increase by another 20% compared to May 2022, Topal emphasized.
According to him, despite the open registries, there is no boom in apartment purchases. Evenly, the sales market will revive, but one should not expect any rapid growth. Agreements signed before the war are now being passed. What will happen to the secondary market is still difficult to predict. Experts expect that by the end of the summer it will start working and will be 20-25% of the pre-war period.
For the time being, the downward trend in prices continues and will continue to do so in the coming months. But we will see how much prices will be lower after a relative update of the real estate market.
On the OLX Real Estate portal, it was noted that the Kiev region is the leader in the number of vacant apartments for rent. Compared to peacetime, the number of premises in the region has almost doubled. If before February 23 it was possible to choose more than 20 thousand houses, then in May there are already more than 40 thousand.
At the same time, the average rental price in May, on the contrary, decreased by almost 22% and is less than 9 thousand hryvnia per month.
If we compare rental prices now and before February 23, then in Kyiv the monthly rent for a one-room apartment has decreased by UAH 1,590 and amounts to UAH 7,945, and for a two-room apartment – by UAH 4,879 hryvnia (11,198 hryvnia), a three-room apartment – for 8,087 hryvnia (16,426 hryvnia), – analysts specified.
