The cost of housing in Kiev and the purchasing power of the population are growing at a commensurate pace, and the ratio of price to annual income is at the lowest level over the past 10 years, according to the Financial Stability Report of the National Bank of Ukraine (NBU).
“Although the cost of housing is growing, it still remains affordable in terms of relative indicators. Prices and incomes of the population are growing commensurately. In the first quarter of 2021, purchasing activity in the housing market was almost a tenth higher than the five-year average for the first quarter,” the NBU said in the report.
According to the forecast, the growth of household incomes, the gradual recovery of mortgages and a decrease in the profitability of deposits will stimulate the growth of demand for housing. At the same time, the long-term implementation of the reform of urban planning control can reduce the number of new supply, which, in turn, affects the rise in prices: in April 2021, the growth of prices in Kiev exceeded 10% per year.
According to the NBU, in January-May 2021, Ukraine issued 213 building permits and 253 certificates for the commissioning of new apartment buildings. In addition, over the past year, only half of the permit applications have been approved.
“The average annual ratio between permits and certificates is about 3 to 4, which is a rather low indicator in comparison with the international level and may indicate a slow pace of new housing construction in the future,” the National Bank said.
