In the second quarter of 2024, the number of agricultural land sale and purchase transactions in Ukraine amounted to 27.3 thousand with a total area of 60.8 thousand hectares, which is 6.3% more than in the first quarter in terms of the number of transactions and 3.3% more than in terms of the area of land in circulation.
These are the results of a study conducted by the Kyiv School of Economics (KSE), commissioned by the USAID program.
“The main factor behind the growth of indicators in the second quarter was a record increase in the volume of the land market in April 2024, when 10.3 thousand purchase and sale transactions were concluded with a total area of 22.5 thousand hectares. After that, the market volumes declined in May (9.0 thousand transactions with a total area of 19.8 thousand hectares) and in June (8.0 thousand transactions with a total area of 18.5 thousand hectares),” analysts stated.
In their opinion, this decline is due to the limited liquidity of farmers, as the sowing campaign has already been completed in May-June, while the harvest has not yet begun, which limited their financial resources. In addition, amid rising land prices after the opening of the land market to legal entities, landowners may wait to sell. Analysts also suggest that there is seasonality in the farmland sales market.
According to KSE experts, in general, the volume of the land market has been recovering since the start of Russia’s full-scale invasion, but has not reached pre-war levels. The average monthly sales of agricultural land for six months of 2024 amounted to 19.9 thousand hectares, which is 38% lower than the pre-war figures. At the same time, the area of agricultural land transactions due to the occupation and hostilities has decreased by more than 20% since February 2022.
If we extrapolate the figures for the first half of 2024 to the whole year and do not take into account the areas where the land market is hampered by hostilities, then this year 0.8% of the total amount of agricultural land will be in circulation, which is almost in line with the figures of countries with developed land markets. (…) Given the trends of monthly sales growth until February 2022, it can be argued that if not for the full-scale war, the average monthly volume of land in circulation would be much higher than 32.2 thousand hectares. Thus, the land market has the potential to grow in the short term, according to the KSE study “Land of Endurance”.
