Over the past year, there has been a revival – the average rate of investment transactions in the Kyiv and regional markets is 15-20% due to liquid complex projects of developers who have not lost confidence during a full-scale war.
At the same time, the return of investors and the purchase of real estate for investment purposes are heavily influenced by the geopolitical situation, news, reports, and forecasts from the front line and shelling of cities.
For their own lives, people choose the comfort segment. The average cost per m2 in comfort-class new buildings is USD 1200-1500.
Investors are interested in the business segment, but only in projects with a cool concept, unique location and minimal competition.
For example, in the business class complex OLEGIV Podil by DIM, we see a very stable demand from investors who are interested in the location of the ancient Podil, the architecture, and our updated project concept in the art boutiqe format.
The usual format of business-class residential buildings at a cost of $2000-$3000 m2 is not popular among investors. In most cases, these are new buildings located in the Pecherskyi, Shevchenkivskyi, and Holosiivskyi districts. Today, there are a large number of apartments from owners on the secondary market who, for various reasons, get rid of them, sometimes giving a big discount, which creates a lot of competition with the primary market for developers.
Last year, investors did not even consider the premium segment for investment.
Now we can state the interest in premium real estate – the more expensive and unique the project, the more people buy it for early investment.
The closed pre-sale of the premium project The One by DIM exceeded all our expectations, and since the beginning of the year we have sold almost 30% of the apartments. This suggests that people are ready to invest even at the excavation stage in high-quality conceptual projects with innovative engineering solutions. Investors value exclusivity and are looking for investment opportunities. By the way, The One has the highest share of investment transactions, because for buyers of premium real estate it is definitely not the main place of residence, but rather 3-5-10 apartments that are bought for investment purposes.
The most popular apartments for investors are 1-2 bedroom apartments up to 60 m2. We have almost 70% of requests for these apartments, which indicates the interest of investors. However, I would like to note that we are talking about our unique location, where there will be no other similar projects.
In general, the share of investment transactions in DIM before the war was 50%.
Now the demand for apartments as an investment is quite restrained and amounts to 20%. People buy them mostly to save money from depreciation and to make money on resale in the future. There is also a small share of transactions for the purpose of renting out real estate.
The main criterion for an investment buyer is to find an object with the highest yield and minimum risks. The biggest risk of investing in residential real estate remains the risk of unfinished construction. Therefore, you need to pay attention to:
– real, not nominal, construction dynamics,
– the number of m2 commissioned during the war
– the developer’s plans in the long term: whether the company plans new projects, improves existing ones, monitors and implements new trends
– the developer’s publicity and fresh and relevant publications in the media, social networks, and website. Their presence indicates that the developer has long-term plans.
– sales pace. If sales are very slow and the discounts are suspiciously attractive, study the information about the property and the developer more carefully.
High investor interest is also demonstrated by high-quality suburban eco-clusters with a recreational component and a wide range of their own infrastructure.
For example, more than 20% of transactions in Park Lake City are made for investment purposes.
We would like to add that in difficult times, DIM, as a system developer with a quality product, always meets the buyer halfway. For example, we now have many financial instruments in place: an installment program of up to 5 years with a down payment of 20%; a program where the first year there are fixed minimum payments from $300 to $600 per month, depending on the selected apartment size; a program with flexible payment terms – the buyer makes a down payment of 30% before the completion of construction, and pays the remaining amount within two years after the object is ready; a trade-in program – you can exchange any property you own for a new one.
