The war caused and continues to cause significant damage to the economy of Ukraine. Today, perhaps, the construction and real estate markets suffered the most from the hostilities. Thus, the report of the National Bank of Ukraine “On Financial Stability” dated June 17, 2022 indicates that since the beginning of the war, the market has practically stopped, both in terms of construction and the sale of housing. At the same time, according to the NBU, the situation has begun to level off in recent weeks, and above all in the regions that are least affected by the destruction from the war.
The most favorable situation is in the western regions of the country, while the National Bank notes that a number of significant problems remain there. First of all, this is a market imbalance, when the prices declared by sellers are not supported by demand and are supported artificially.
As for construction, here, according to the regulator, the situation is more optimistic. Developers have restored work on almost 50% of the facilities in the country. The most positive dynamics is observed in the western regions, in the center and in the Odessa region.
As for the office real estate market, according to the NBU, it suffered to a greater extent from the massive transition of staff to remote work.
The Open4business portal asked financial expert Igor Stakovichenko to comment on the current situation. In his opinion, the severity of the crisis in the real estate market directly depends primarily on the intensity of hostilities in various regions of the country, as well as on the well-being of the population.
“We see that the demand for housing in the same Kharkiv and Dnipro collapsed almost equally. At the same time, housing construction in Kharkiv is at a standstill, while in Dnipro it is being restored. This is due to the risk assessment by developers, since the Kharkiv region is now under devastating shelling by the aggressor,” the expert believes.
In his opinion, most of the prices in both the primary and secondary markets are dictated by the overestimated expectations of developers who continue to hope to find a buyer for their goods despite changes in the economy and a decrease in the income of part of the population.
“Builders think in the old way, and form the price based on the cost and those mark-ups that were fair in the pre-war period. Buyers have become much more cautious and assess the risks, in particular, the presence of bomb shelters, evacuation routes, and so on. As for the secondary market, here prices are often drawn from the ceiling, hoping more for luck, ”said Stakovichenko.
According to the expert, market recovery can be expected after the end of the war, when the demand for housing will increase and investors’ fears will decrease.
CONSTRUCTION, EXPERT, FINANCY, IGOR STAKOVICHENKO, MARKETS, REAL ESTATE MARKET, STAKOVICHENKO
German Minister of Agriculture Cem Ozdemir called for thinking about creating not temporary, but permanent alternative routes for the export of grain from Ukrainian territory, the EFE agency reports on Friday.
“The Black Sea cannot be considered as a safe route for Ukraine in the long term, even after the end of hostilities,” the minister suggested at a press conference. For this reason, according to the minister, “it is necessary to look for one or more permanent alternative routes.”
EFE notes that Ozdemir is skeptical about the chances of success in negotiations with the Russian Federation on the export of grain from Ukrainian ports.
The leaders of the European Union called on the European Commission to promptly present its proposals for EU support for Ukraine in the reconstruction of the country after the war waged against it by Russia.
The conclusions, adopted at the European Council meeting on Thursday in Brussels, noted that the European Commission “soon will submit a proposal to provide Ukraine with a new exceptional macro-financial assistance of up to 9 billion euros in 2022.”
“The European Council calls on the Commission to promptly present its proposals for EU support for the reconstruction of Ukraine, in consultation with international partners, organizations and experts,” the document reads.
The European Council has published the conclusions of the meeting regarding granting Ukraine the status of a candidate member of the European Union.
“The European Council recognizes the European perspective of Ukraine, the Republic of Moldova and Georgia. The future of these countries and their citizens lies in the European Union. The European Council has decided to grant the status of a candidate country to Ukraine and the Republic of Moldova,” says the third section of the conclusions entitled “Application for membership of Ukraine, the Republic of Moldova and Georgia”.
The conclusions note that the European Commission is requested to report to the Council on “the fulfillment of the conditions specified in the Commission’s opinions on relevant applications for membership under its regular enlargement package”. “The Council will decide on further steps once all these conditions are fully met,” the document says.
With regard to Georgia, it is stated that the European Council is “ready to grant the status of a candidate country to Georgia after the priorities indicated in the Commission’s opinion on Georgia’s application for membership are resolved.”
“Each country’s progress towards the European Union will depend on its own merit in meeting the Copenhagen criteria, including the EU’s ability to admit new members,” the conclusions said.
American Zoom Video Communications for the 2022-2023 academic year will provide free access to Zoom Meetings for Education software.
“This is very important during the war, when all education takes place online. Now some students are defending their theses in the trenches, protecting the state, and teachers are conducting lessons for schoolchildren directly from bomb shelters,” wrote Deputy Prime Minister – Minister of Digital Transformation of Ukraine Mikhail Fedorov on his Telegram channel on Wednesday.
The Ministry of Education and Science, in a letter to educational institutions published on the Osvita.ua portal, said that the extended access of Large Meeting allows participants in the educational process to record meetings, as well as conduct training sessions for 1000 participants at the same time.
Also, according to the Ministry of Education, educational institutions that have applied for advanced features of Google Workspace for Education will receive the corresponding update until August 2022.
Ukraine may need up to EUR1 trillion in foreign aid to repair the damage caused by the Russian invasion, Bloomberg reports the words of the head of the European Investment Bank, Werner Hoyer, at a press conference in Frankfurt on Tuesday.
“I put (estimate) a trillion because I saw numbers in the public space that I consider completely unrealistic when I see the level of destruction in Ukraine,” Hoyer said.
In his opinion, Europe will have to play the biggest role in these efforts.
The head of the EIB also said that he is currently trying to redistribute the bank’s liabilities in the amount of EUR1 to EUR1.5 billion to restore Ukraine. According to him, the corresponding approval can be obtained as early as this week.
Prime Minister of Ukraine Denys Shmygal, in an interview with Interfax-Ukraine at the end of March, also said that Ukraine’s losses from Russia’s full-scale military aggression, taking into account both the destruction already inflicted on infrastructure and the economy, and future losses in subsequent years, exceed $1 trillion.
According to him, its first component is direct infrastructure damage, which at that time was estimated at about $120 billion, and taking into account military infrastructure and other civilian expenses, more than $270 billion.
The prime minister added that the second component is the calculation of the losses of the Ukrainian economy: the fall in GDP during the war, lost profits and investments – more than $ 290 billion, and the third – the losses received by the state as a result of a decrease in GDP in the future.
According to the State Statistics Service, in 2021, Ukraine’s GDP grew by 3.4% after a 3.8% decline in 2020, its nominal volume amounted to about $200 billion. This year, the fall in GDP is predicted by various experts in the range of 30-45%.
