The average prices for new business-class residential buildings in Kyiv amounted to UAH 48,800 or $1,820 per square meter in early September, which is 30% higher than in the same period last year, Ramil Mehdiyev, CEO of ENSO, has told Interfax-Ukraine.
“The prices for business-class buildings are more intensified than the average prices for new buildings in Kyiv, which have risen over the year from UAH 26,600 to UAH 32,000 per square meter, that is, by 20%,” he said.
The expert explained the difference in the dynamics by a higher share of imported components in construction of business-class real estate. “Imported components are becoming more expensive than local production. The situation with imported materials is aggravated by quarantine restrictions and lockdowns, which have significantly complicated logistics,” Mehdiyev said.
In addition, in business class, the architecture and design solutions are usually much more complex, which bring additional costs both for materials and for work performance by qualified specialists. “You should also not forget about the global trend of housing prices rise and the fact that real estate in Ukraine has become almost the main investment tool for citizens. This increases demand, which in turn affects the price,” Mehdiyev said.
The expert predicts that the upward trend in the cost of housing will continue next year. “According to our estimates, the trend will not change until at least mid-2022. Much depends on the macroeconomic situation and the recovery of the world’s leading economies. First of all, we are talking about China, which is rapidly increasing consumption of raw materials, thereby heating up demand for the same metal,” Mehdiyev said.
According to him, we should also not exclude the emergence of new strains and, as a result, the possible introduction of quarantine restrictions. “This will most likely lead to a repetition of the situation in the spring of 2020, when there were almost no sales in the real estate market. Actually, this led to deferred demand, which was tapped in August 2020. At the same time, a rapid rise in prices began,” the expert said.
The development company ENSO, established in 2017, is implementing three projects in Kyiv.
The cost of construction of business class facilities over the past five years has increased by more than 30-40%, in 2021 it may grow by another 10-20%, Head of the Sales Department of A 136 Highlight Tower Olena Polesko told Interfax-Ukraine.
“The trends of the last two years indicate the interest of a potential buyer in high quality construction with the use of new technological engineering solutions. Special attention is also paid to the architecture of the building, future comfort level and infrastructure in the residential complex under construction,” Olena Polesko said.
According to the expert, the location remains one of the main conditions for the construction of business class complexes, therefore, the central part of the city is usually chosen for such purposes.
“The demand for high-quality business class facilities annually increases by an average of 7-10%. In addition, every year in Kyiv there are less and less free plots for construction in the central part of the city. Hence the systematic growth in the cost of business class apartments,” the expert said.
According to her data, from 2015 to 2020, the cost of apartments in business class residential complexes increased by more than 50%.
According to Polesko, for objects belonging to the business class category, a closed adjoining territory (for example, a green lounge area with outdoor fireplaces and soft sofas), the presence of its own parking lot with electric chargers, infrastructure on the ground floors, the presence of office premises with a separate entrance, round the clock video surveillance, security service, a spacious lobby with the ability to hold business meetings, as well as round the clock concierge service are considered compulsory.
“The status of the facility obliges developers to create new functional services and opportunities, such as, for example, smartbox – a separate space for sports equipment, Lovelypaw – a room for caring for pets, a room for a children’s area with professional babysitting services, a fitness area, or even Fashion hub – a service for residents of such complexes, the essence of which is the ability to order new items from the best designers’ boutiques in Kyiv and use fitting rooms on the territory of a residential complex,” the expert said.
As for technological innovations, building of the business class are increasingly equipped with general house water filtration, individual ventilation units with air purification from harmful gases, unpleasant odors and allergens, for example, pet hair or fine dust.
According to the expert, in 2021, due to the lack of new sites, the supply of business class apartments in the central part of the capital may decrease by 15-20%.
“Due to the reduction in supply, the growth in the cost of housing in modern high-quality business class facilities in 2021 may be from 10% to 20%, depending on the quality of construction, and the conditions created for the comfort of future buyers,” the expert said.
