The demand for the purchase of houses in the suburbs of the capital will increase in the first half of 2023.
This forecast in a comment to “Interfax-Ukraine” gave the developer of the cottage town “Park House” Rudolf Arzumanyan.
“The demand for houses will increase in anticipation of summer. This will also be facilitated by the new air defense systems, which will close, we hope, in the near future, the sky over the capital region,” Arzumanyan said.
He added that the suburban real estate market of Kiev region since the beginning of the war went through several stages. In the spring there was a surge in demand for rent, including at the expense of displaced people, then there was a demand to buy.
“In general, if anyone had finished houses with renovations, they all sold them or rented them out long-term. People with money understand that it is possible to provide more or less comfortable and predictable conditions of stay only in a private house due to autonomous heating, gas, firewood, electricity, autonomous water supply and sewage,” explained Arzumanyan.
According to him, developers of suburban real estate provided autonomous power supply through generators and high capacity batteries such as SOUOP, ECOFLOW, etc. During the year, however, there was not as much new facility commissioning as the market demanded.
“New facilities are not being commissioned because of a shortage of handymen and problems with materials. Another retarding factor is the imbalance. Prices have gone up for almost everything, but not for real estate. Thus, the market froze,” he said.
Another trend: there were virtually no investment deals during 2022.
“Rental prices in dollars have fallen by half, people are afraid to invest money. In fact, the demand to buy fell by 80% compared to last year,” said Arzumanyan.
The Ukrainian real estate market is unbalanced, amid low demand and declining new supply, reported prices from developers are growing, while rental prices are falling, according to the National Bank of Ukraine (NBU) Financial Stability Report for December 2022.
It notes that demand for housing remains weak and unstable: the interest of few buyers depends on the intensity of the shelling of settlements and decreased again in the fourth quarter.
The existing demand is focused primarily on ready-made housing for residence, almost zero speculative for the purpose of further resale or lease.
The number of new buildings under construction is slowly increasing after an almost complete standstill in the first months of the war. In the country as a whole, work has resumed on more than two-thirds of sites, mostly in housing complexes in the final stages of construction. At other sites the resumption of work has occurred only on paper.
According to the State Statistics Committee of Ukraine, for the three quarters of 2022 completed construction of 2.8 million square meters. m multifamily housing. As noted in the report, this is half the record for the same period in 2021 and only a quarter less than the average of the previous five years.
Much worse is the situation with the start of new projects. In the first nine months of this year, developers received permits to build half as many multifamily units as the average for the same period of the previous four years. However, obtaining permission is not an indication of the start of construction – the actual start of construction work can be delayed for a long period.
The report also reminds us that, according to the “Russia Will Pay” project, more than 16,000 apartment buildings and almost 127,000 private homes have been destroyed or damaged since the start of the full-scale war until November.
The low activity of the primary real estate market, together with the significant amount of housing damaged by the shelling, will lead to a reduction in the supply of housing in the near future, and in the future to a possible shortage of housing. At the same time, the declared purchase prices are mainly increasing, while the rental prices remain almost twice as low as before the war.
The report states that the multidirectional price movements reflect an imbalance in the real estate market, relatively cheap rents will deter demand for the purchase of housing.
The price-to-rent ratio has risen substantially since March and is now at an all-time high. In terms of price, renting seems to be a better alternative than buying, and this situation will persist for a long time.
The forestry industry in Ukraine by the end of 2022 received a record for the time of independence proceeds from the sale of products in the amount of 23.5 billion UAH, which is 3.1% more than last year’s figures, profit of the industry amounted to 1.3 billion UAH (+30%), and the amount of taxes and fees paid – 8.9 billion UAH (+6.7%).
As the head of the State Agency of Forest Resources of Ukraine Yuri Bolokhovets said in Facebook on Wednesday, the average salary of the department’s employees rose to 20 thousand UAH.
“Even during the war, we did not stop capital investments, which exceeded 800 million UAH. The main priority is the prevention of occurrence and extinguishing of forest fires. Observation towers with video surveillance, fire trucks and modules, 188 cross-country vehicles for patrolling, 165 tractors, 12 units of specialized equipment (excavators, graders, etc.) necessary for implementation of fire prevention measures, forest roads construction”, – he wrote.
Also in 2022 the State Forestry Agency purchased the first two innovative forestry machines, three forestry harvesters, a forwarder and two skidders. Bolokhovets noted that for the first time in Ukraine with ultramodern equipment can be provided the whole technological cycle of forestry, from planting material to harvesting. The department is actively involved in countering the energy crisis: during the year were purchased three lines to produce technological chips and five complexes for wood cutting.
The head of the department noted that this year the activities on protection and reproduction of the state hunting fund were preserved. However, hunting throughout Ukraine has been banned since the beginning of the Russian full-scale invasion, so no funds from users of hunting grounds are temporarily received.
According to Bolohovets, this year the demand for Ukrainian timber has dropped significantly, as the war has almost stopped construction inside the country, and the Russian blockade of the Black Sea ports has led to the closure of Asian markets for Ukrainian exports, and the logistics of timber to Asia through other channels has been unprofitable. At the same time, as a result of the recession, the EU market has been oversaturated with its own products.
As a result, in Ukraine in 2022 the weighted average stock prices for pine logs fell by more than 20%, while the cost of logging has increased significantly, in particular, only the fuel has doubled in price.
“We had to pursue a very flexible policy and be in a constant dialogue with the business. Few people have noticed, but this year not only raw timber, but also lumber for the first time began to be sold through open auctions. We completely abandoned the practice of direct contracts. As a result, we managed to keep the balance: the profitability and logging volumes were reduced, but kept at an acceptable level, and the market and Ukrainian processors were provided with available raw materials,” summed up the head of the State Forestry Agency.
Ukrainian President Vladimir Zelensky has announced a message to the Verkhovna Rada on the external and internal situation of Ukraine
“Soon I will present my view on the implementation of these tasks in the annual message to the Verkhovna Rada on the external and internal situation of Ukraine. I want this message to be not a report, but our conversation with you about the next year,” he said in a video message on Tuesday.
According to him, “This week will be politically important for Ukraine. We’re going into next year and we have to maintain a common understanding of our national goals.”
“Of course, it is the liberation of our land from the enemy, as well as the reconstruction of Ukraine, the return of our people home, the further rapprochement of our state with key partners, the opening of new opportunities for Ukraine in the world – this is the task for the near future. And not only for the state, but also for each of us,” Zelensky said.
The temporary administrative board of the Antimonopoly Committee of Ukraine (AMCU) decided to impose a fine on LLC “Ukrstalpostach” and LLC “Ukrainian Pipe Plant” for collusion in their participation in public procurement.
According to a press release on Tuesday, the case involves eight procurement procedures that were announced by different customers.
“When considering the case, the circumstances were established, which in their totality indicate the commission by the defendants of anti-competitive concerted actions to eliminate competition between them when participating in the tenders. There were irrefutable facts that indicate coordinated behavior of the companies in the preparation and participation in the bidding, communication between them and exchange of information,” – stated in a press release.
According to the AMCU, such concerted actions of public procurement is a violation (Clause 4 Part 2 Article 6, Clause 1 Article 50 of the Law on Protection of Economic Competition).
For collusion LLC “Ukrstallpostach” and LLC “Ukrainian Tube Works” have been fined by the Committee in the total amount of UAH 103,256 million. In particular, “Ukrstallpostach” LLC was fined in the amount of 94,890 million UAH, “Ukrainian Pipe Works” LLC – 8, 366 million UAH.
The US dollar rate was changing little against the euro and the pound during the Wednesday morning session, but demonstrated a considerable rise against the yen amid increasing US government bond yields.
The ICE-calculated index showing the U.S. dollar’s performance against six currencies (euro, Swiss franc, yen, Canadian dollar, pound sterling and Swedish krona) is up 0.1%, as is the broader WSJ Dollar Index.
The dollar/yen exchange rate is up 0.4 percent at 134.08 yen as of 7:48 a.m. ksk, up from 133.50 yen at the end of last session.
The yield on 10-year U.S. government bonds on Wednesday morning is about 3.85%, the highest since early November. The rise in yields is due to fears that China’s successive easing of anti-coverage restrictions could intensify global inflationary pressures, Trading Economics writes.
The dollar also continues to receive support from the Federal Reserve’s (Fed) hawkish mood. The Fed expects to raise its key interest rate to 5-5.25% over the next year and hold it at that level until at least early 2024 to return inflation to its 2% target.
The U.S. rate now stands at 4.25-4.5%, meaning the Fed plans three more hikes of 25 basis points. Many market participants expected the final rate level to be lower and were hoping for a reversal in the Fed’s monetary policy and a rate cut at some point next year.
The euro/dollar pair is trading at $1.0645 versus $1.0642 at the close of Tuesday’s session.
The pound sterling is losing less than 0.1% and is trading at $1.2026 versus $1.2031 the day before.
