The Delta-Lotsman branch of the state enterprise Administration of Sea Ports of Ukraine announced a tender for compulsory motor third party liability insurance (CMTPL) on July 11
According to the electronic public procurement system Prozorro, the expected cost is UAH 84,330 thousand.
Documents for participation in the tender are accepted until July 21.
SE “Delta Pilot” was established by order of the Ministry of Transport of Ukraine in 1998 in order to improve the conditions for ensuring safety of navigation, protection of human life at sea and the environment, in the territorial sea of Ukraine in accordance with the requirements of international agreements and conventions, streamlining the structure of marine pilot services in the north-western part of the Black Sea.
Recently, I came across a lively discussion on social media about a certain issue, and it went like this: “There is a war in the country, the real estate market is not even operating at half capacity, and prices are rising. Who will buy it?”. I have an answer: they are and will continue to grow, because no one has canceled the laws of the market. Another question is what to do with the limited effective demand. In my opinion, the answers should be sought within the market, not outside, relying solely on reparations or government support. Let’s go through everything in order.
Why prices are rising
The key factor affecting the price of a square meter has been and remains the growth of construction costs and related expenses, primarily influenced by inflationary processes. Let me just remind you that we had almost 27% inflation in annual terms. The price tag is also driven up by contract extensions and sometimes by radical changes in supply chains due to the loss of capacity of certain building materials producers in the southern and eastern regions and the relocation of many businesses. We should also mention the cost of labor, which increased by an average of 37%, and we should not forget about the costs of fuel and lubricants, machinery, and goods and services of 40 related industries involved in housing construction. Hyperinflation and exchange rate fluctuations have hit the market.
For your understanding: last year, the weighted average cost of housing construction increased by at least 45%. In some categories of building materials, we saw growth of 30-70%. Concrete, glass, putty, wood, and iron are the record holders. This directly affects the price of a square meter.
What to do with real demand
At the same time, limited effective demand in the market, and even almost zero sales in some stagnant periods, is a constraint on price growth. In some months, if the company sold 5-10 apartments per month, it was already a success and an indicator that people trust the brand and believe in the product.
All this time, it was necessary to continue building so that people had time to adapt, to make sure that the actions were firm, that they were being built and would be completed, that it was not in words but in actions. Nothing says it better than your product, its format and liquidity, as well as the real construction dynamics on the site.
By the way, the situation with real demand has been improving since the end of winter. And in the spring months, the team managed to return more than a third of the pre-war figures, despite the complexity of the situation.
Why did we succeed? I believe that a combination of factors worked here, which can be scaled up further if desired:
1. We resumed construction in June 2022 and, despite all the difficulties of the first year of the full-scale war, we persevered and commissioned 19 thousand square meters.
2. Investors saw that the company was working and gradually began to pay under installment agreements. As a result, if at the beginning of the full-scale invasion only 10% of installment agreements were paid on time, now this figure reaches 50%.
Exactly half of those who bought real estate from us are not waiting for the war to end and are already fulfilling their obligations. They see that every hryvnia from their pockets is actually spent on the construction of their own home, not just a new pit. We are now working to ensure that by the end of the year the percentage of those who pay under installment agreements will be at the level of 80-90%.
3. We have developed financial instruments to support and stimulate demand.
For example, in October-December, we offered special conditions for debt repayment and early repayment of installment plans. We offered a favorable exchange rate, for example, UAH 33-34/$, and debt restructuring to start making payments. We launched a guaranteed yield program at 10% per annum in dollars, a trade-in program.
Of course, it is too early to dream about the volume of transactions that we had before the war. The market’s recovery and potential will directly depend on the Ukrainian Armed Forces’ counteroffensive, or rather, on its results and timing. We can already see that psychologically, buyers and investors are gradually ready to return to the market if there is a complete coincidence in their expectations in the price-value-construction time axis and real dynamics.
Author: Alexander Nasikovsky, Managing Partner of DIM Group of Companies.
Ukrainian tennis player Elina Svitolina beat the world number one in the quarterfinals of Wimbledon and reached the semifinals of the tournament in London.
Svitolina defeated Polish tennis player Iga Swiontek in three games with the score – 7:5, 6:7, 6:2.
In the semifinals of Wimbledon, which will be Svitolina’s second career title, she will meet Czech tennis player Markéta Vondroušová.
Gold prices are rising on Tuesday amid a decline in the dollar and yields on U.S. government bonds on expectations of the publication of data on U.S. inflation.
Quotes of August gold contracts on the New York Comex exchange by 18:52 Q2 rose by 0.27% to $1936.2 per troy ounce.
New U.S. inflation data will be released on Wednesday. Analysts polled by Trading Economics on average forecast consumer price growth in the world’s largest economy slowed to 3.1% last month from 4% in May.
Core inflation (the CPI Core index, which excludes fuel and food prices), meanwhile, stood at 5.3% in May and is forecast to fall to 5% in June.
Ahead of the statistical release, the dollar index is down 0.1% and the yield on 10-year US Treasuries is down 1.5 basis points to 3.986%.
“We see government bond yields falling earlier in the week as investors wait for inflation to fall in June,” said StoneX analyst Fawad Razaqzada. – This has slightly boosted the comparative attractiveness of gold versus bonds.”
Ukraine’s key macroeconomic indicators have stabilized somewhat, but continue to testify to the significant role of international structures in keeping the Ukrainian economy in working order.
The National Bank estimates that Ukraine’s GDP decline in the first quarter of 2023 year-on-year has slowed significantly to 13.5% from 31.4% and 30.6% in the fourth and third quarters of 2022, respectively. Meanwhile, Ukraine’s Finance Minister Serhiy Marchenko gave his forecast for Ukraine’s GDP growth in 2023 to 3.2%, while the government previously estimated GDP growth at 1% and the National Bank recently improved it from 0.3% to 2%. Investment firm Dragon Capital also forecast real GDP growth of 3% in 2023, while it previously expected it to fall by 0.5%. The World Bank has worsened its forecast for Ukraine’s gross domestic product growth for this year to 2% from 3.3%, which it predicted in January 2023.
Recall that Ukraine’s GDP in the first quarter of 2023 fell by 10.5% compared to the first quarter of 2022 after falling by 31.4% in the fourth quarter, 30.6% in the third quarter, 36.9% in the second quarter and 14.9% in the first quarter of last year.
At the same time, the Ukrainian authorities have set a super ambitious goal to increase GDP to $1 trillion over 10 years, First Deputy Prime Minister and Economy Minister Yulia Sviridenko said at the Ukraine Recovery Conference in London.
Maxim Urakin, founder of the Kiev-based think tank Club of Experts, drew attention to the significant decline in Ukraine’s foreign trade balance. “The negative balance of Ukraine’s foreign trade in goods in January-March 2023, according to the State Statistics Committee, increased 26 (twenty-six) times compared to the same period of 2022 – to $5.394 billion from $0.208 billion. Exports of goods from Ukraine for this period compared to the first quarter of 22 decreased by 26.1% – to $10.306 billion, and imports increased by 10.9%, to $15.699 billion,” – said Maxim Urakin.
Military expenditures of the state budget continue to grow. Budget expenditures to support the AFU in the form of purchase of military equipment, weapons, ammunition, defense products, personal protective equipment in May increased to UAH 43.4 billion in February (15.6% of all expenditures) from UAH 42.5 billion (18.5%) in April and UAH 34.4 billion (15.3%) in March.
Ukraine in January-March 2023 realized industrial products (goods, services) in the amount of UAH 755.755 billion, which is 14.2% less than in January-March 2022 (UAH 880.419 billion), including outside the country – in the amount of UAH 137.783 billion.
The total state debt of Ukraine in April 2023 increased by 3.6% and reached a new historical maximum: in dollar terms – by $4.37 billion, to $124.28 billion, in hryvnia terms – by UAH 159.9 billion, to UAH 4 trillion 544.9 billion.
At the same time, due to international aid, Ukraine’s international reserves reached a record high in June, amounting to almost $39bn, which is a record high in the history of independent Ukraine, the head of the National Bank of Ukraine, Andriy Pyshnyy, has said. The head of the National Bank specified that in June the government’s accounts received: $1.6 billion from the EU, $1.2 billion from the USA, $69.1 million from the World Bank and $15.0 million from the government of Finland.
Inflation in Ukraine in May 2023 slightly accelerated to 0.5% in May from 0.2% in April, and on an annualized basis in May-2023 it fell to 15.3% from 17.9% in April, 21.3% in March, 24.9% in February and 26.6% in December.
Retail turnover of Ukraine in January-March 2023 compared to the same period of 2022 decreased by 9.1% and amounted to 390.1 billion UAH. According to the statistical Department, at the same time in March of this year recorded an increase in retail turnover to March last year by 35.5%, while in February the decline was 22.6%. Recall that the retail turnover of Ukraine in 2022 compared to 2021 decreased by 21.4% and amounted to 1.398 trillion UAH.
On July 10, the National Bank of Ukraine has annulled the license of Financial Company Rialto LLC (Kiev) to provide financial services, namely, to lend money, including on financial credit terms.
As reported on the website of the regulator, following the results of an unscheduled inspection on the protection of the rights of consumers of financial services found violation of the financial company of the requirements of current legislation, in particular, the laws of Ukraine “On financial services and state regulation of financial services markets”, “On consumer credit”, as well as a number of regulations of the National Bank of Ukraine.
Rialto FC was registered in June 2020. The authorized capital is UAH 6 mln.
