Investment deals account for up to 10% of DIM Group’s sales structure, while the requested area of housing has decreased by 15%, DIM Group Marketing Director Daria Bedia said in response to an Interfax-Ukraine inquiry.
“As of today, we have about 10% of investment transactions in the formats of a multifunctional cluster, eco-city, multifunctional complex based on the concept of a 15-minute city in the central business and historical center, while the vast majority of transactions – a little more than 90% of them – are still exclusively for themselves. The fact that investors have started to return to the market at all is an encouraging signal,” she said.
According to her, the first investment deals in the company’s properties began in late summer and early fall of 2023. Before that, professional investors did not dare to return to concrete, but the situation is changing.
“Firstly, the profitability of individual complexes and formats, given the high rate of construction, successful concept and growing real demand for this object, is still higher than bank deposits, even in times of war. Secondly, when evaluating an investment for the future, people realize that a liquid lot can bring 50-60% in the future if you choose a competent strategy,” Bedia says.
According to her observations, the majority of investors now are those who had real estate in their portfolio before the war. They come on three conditions: high rates of construction, a liquid concept and brand of the developer, its reputation over the past two years of war.
At the same time, the requested area has decreased by about 15%, while interest in European layouts has doubled. A large kitchen-living room of 17 sq. m in comfort+ and 20 sq. m in the business segment, two bathrooms, and separate bedrooms are becoming a must-have attribute. The area of 1-room apartments, which are most often bought in the business segment, reaches 50-55 sq. m, 2-room apartments – 75-80 sq. m, 3-room apartments – 100-120 sq. m.
Today, buyers in the comfort+ segment are most interested in 1-room apartments of 40-47 sq. m. with a kitchen-living room of 20 sq. m. and a separate bedroom with a dressing room. The top 2-room apartments are 68 to 75 sq. m. in size with two separate bedrooms and a kitchen-living room of 20 sq. m., and 3-room apartments are 85-90 sq. m. in size with three separate bedrooms, one of which is a master bedroom with its own bathroom and wardrobe, and a large kitchen-living room is also a priority.
DIM Group was founded in 2014 and consists of six companies covering all stages of construction. To date, it has commissioned 12 houses in six residential complexes with a total living area of over 218 thousand square meters. Six residential complexes of “comfort+” and “business class” categories are under construction: “New Autograph, Metropolis, Park Lake City, Lucky Land.
Ukrainian developers have concluded the first housing purchase and sale agreements using housing certificates issued as compensation for destroyed housing under the eRestoration program.
Today, housing certificates are used to purchase apartments in completed projects, Anna Laevska, commercial director of Intergal-Bud, told Interfax-Ukraine.
“Buyers are mostly focused on affordable housing in the economy and comfort segments. As of now, ready-made apartments in buildings that have already received a certificate of commissioning are available for participation in the program in the capital region. However, we plan to expand the offer with facilities under construction. We are talking about projects in Lviv,” she said.
According to Laevska, the first transaction under the program concerned a two-room apartment with turnkey renovation in the Syretsky Gardens residential complex.
According to the developers interviewed by Interfax-Ukraine, buyers with certificates are offered installment purchases and loans, the possibility of using the certificate as a down payment, and in some cases, individual offers and discounts.
Developer Alliance Novobud has also concluded the first deal under the eRestoration program: a family from Kyiv region purchased a three-bedroom apartment in a finished building in the Madison Gardens residential complex in Brovary using a housing certificate.
“There are requests, certificate holders are interested in different formats and classes of housing. With the eRestoration certificate, you can purchase any residential property in all Alliance Novobud projects. We have individual offers for each individual request. For example, a discount, installment plan, or lending for the remaining amount by partner banks on special terms,” said Iryna Mikhalova, CMO of Alliance Novobud.
According to the press service of Kovalska Real Estate, when buying a home using a certificate in the developer’s projects, all available promotions and discounts are available to customers, including a loyalty program for military personnel and rescuers. There is also an option to purchase by installments at 0% for up to 3.5 years for an amount exceeding the value of the certificate.
According to the company, customers are interested in purchasing two- and three-bedroom apartments in ready-made buildings. At the same time, in January, apartments were already reserved for two certificates.
The developer also expects to expand its offer with the help of newly constructed facilities.
“At present, the certificate can be used to purchase an apartment in three commissioned houses by Kovalska. We are actively working, and soon it will be possible to apply the certificate to the objects under construction,” the company explained.
The DIM Group also offers to use installment purchase programs from the developer for up to five years if the amount of the certificate does not exceed the cost of the selected apartment. The program covers both already built residential complexes in Kyiv and the region and buildings at the final stage of construction.
“We are already working with the first applications from certificate holders who have chosen an apartment in our residential complexes and applied for a deposit. In the near future, we are waiting for the approval of applications and the receipt of funds,” said Daria Bedia, Marketing Director of DIM.
In general, the surveyed developers assess the housing certificate program with cautious optimism, noting its social importance.
“This is a very important government initiative aimed at helping Ukrainians who lost their homes during the full-scale invasion. It is difficult to overestimate the social component of eRestoration. However, it is difficult to predict whether the certificates will have a significant impact on the primary real estate market,” said Ms. Laevska.
According to the expert, the certificate program can be developed following the example of the eOselya affordable mortgage program, where the share of transactions in the primary market is no more than 2%.
At the same time, with competent support and uninterrupted financing, the compensation program can become a powerful market driver, according to Alliance Novobud.
“Government programs such as eHouse and eRestoration can have a significant impact on the demand and purchasing power of Ukrainians. For example, under the eHouse program, some projects account for up to 40% of sales of the total volume. The new construction market has high expectations for eRestoration,” summarized Mikhaleva.
As of January 31, 462 certificates for UAH 1.1 billion have been sold under the eRestoration compensation program, and another 311 have been booked. The total number of applications for compensation is 9.3 thousand, and 2.6 thousand certificates have been issued.
As reported, on May 10, 2023, Ukraine launched the eRestoration program, under which owners of damaged housing began receiving compensation of up to UAH 200,000 for repairs.
On August 1, 2023, Diia started accepting applications for compensation for housing destroyed by the war. Compensation will be paid to individual owners of housing that was destroyed due to hostilities after February 24, 2022, is not subject to restoration and is located in the unoccupied territory and not in the area of active hostilities. On December 27, 2023, the issuance of housing certificates in Diia began.
In May 2023, the Cabinet of Ministers allocated UAH 4 billion 433 million 350.0 thousand for compensation under the eRestoration program, in November – another UAH 1.5 billion for compensation for damaged property and UAH 2.5 billion for certificates for destroyed property.
Developers note a high demand for the eHouse program, but there are still not enough transactions to have a noticeable effect on the primary housing market, according to developers interviewed by Interfax-Ukraine.
“At present, the number of apartments purchased under the eHouse program in residential complexes under construction does not exceed 1%. For a more or less tangible impact of the state mortgage on the primary market, this figure should increase to at least 25-30% of the loans issued – up to 200-250 mortgages per month,” said Volodymyr Sementsov, co-founder and managing partner of INSPI Development.
Daria Bedia, Marketing Director of DIM Group, expressed a similar opinion. According to her, while there are not enough transactions under the eOselya program in the primary market, at the same time, installment offers from the developer are in demand.
“We do not believe in eHouse in particular because of the insufficient volumes in the primary market: when at least 300 loans out of 1,000 per month are issued in the primary market, it will feel a certain effect. However, we have hopes for compensation certificates for destroyed housing. They can give an incentive to the market recovery next year,” the expert believes.
According to her, DIM has increased the number of financial instruments for buyers, including long-term installment programs for up to seven years, exchange rate fixing, and discounts. The company also offers individualized installment terms and discounts for military personnel, including installments in hryvnia without reference to the exchange rate and free white box finishing.
KAN Development also offers special conditions for purchasing housing in its projects, including long-term installment plans from the developer. The company noted a small number of transactions under the eOselya program, while the developer has already received the first requests for housing under the housing certificate program.
Demand for ready-to-move-in apartments in Ukraine’s primary real estate market is gradually growing, with their share in the sales structure of some developers reaching 50%, according to a survey of developers conducted by Interfax-Ukraine.
“Before the full-scale war, the share of renovated apartments from the developer was about a third of total sales. Now it is up to half of the transactions. The demand for owner-occupied apartments is growing. Firstly, it is cheaper than finishing the apartment yourself. Secondly, it is much faster. You can move into a new home immediately after the building is completed, while renovation work done by yourself takes at least several months to six months. For many people, this factor is critical,” said Anna Laevska, commercial director of Intergal-Bud.
According to her, Intergal-Bud offers buyers a finishing of the apartment (flooring, wallpaper for painting, interior doors, electrical wiring and electrical fittings, plumbing) with designer renovation in three styles, as well as installation of furniture and kitchen.
Ms. Laevskaya noted that over the past year and a half, the company has revised the prices for the renovation service several times. Today, the cost of designer renovation is $300 per square meter, which is $100 lower than before the full-scale war. A furnished repair from the developer will cost $600/sq. m.
“We understand that renovating an apartment in a new building is a big expense. In the context of exchange rate fluctuations, when everything around us is getting more expensive, a democratic price offer from the developer is a step towards Ukrainians who want to improve their living conditions. We have no plans to revise the cost of repairs, but we understand that further developments will depend on the prices of materials,” the expert said.
According to DIM Group, the share of ready-made renovated apartments in the structure of demand in the primary market is 45%.
“The advantages of a renovated apartment from a developer include maximum transparency and accountability. The buyer delegates to the developer the supervision of the order fulfillment and already accepts a fully finished product at the stage of receiving the keys,” said Daria Bedia, DIM’s Marketing Director.
The developer offers four types of finishes in its projects: basic renovation at a cost of $650/sq. m, kitchen with appliances – an additional $50/sq. m to the cost of basic renovation, cabinet furniture – “plus” $30/sq. m, upholstered and separate furniture – “plus” $20/sq. m. DIM engaged Anthracite design bureau to develop the renovation projects.
“We set ourselves an ambitious task: to overcome the prejudice that a renovated apartment in a new building is always about a typical renovation with budget materials, the same colors and style. Our partner has developed a whole line of adaptive design projects that differ in style, color scheme, content, and price,” Bedia explained.
Meanwhile, apartments with ready-made repairs are not in demand in business-class residential projects and are more relevant in comfort and economy class, according to City One Development.
“Based on many years of experience and analyzing customer requests, we can say that it is impractical for a developer to make ready-to-move-in apartments in the business segment. The vast majority of our clients choose apartments for themselves and want to choose and develop the design themselves. Renovated apartments are relevant in the economy and comfort classes. But this is no more than 5% of the total demand,” says Dmytro Novikov, Marketing Director of City One Development.
Among the disadvantages of finished apartments, Novikov mentioned the higher cost, longer terms of obtaining housing and mostly standard design solutions that do not take into account the individual request of the buyer.
According to him, the experience of sales of the first and second phases of Novopecherski Lypky showed that the most popular renovated apartments were one-bedroom apartments, while two- and three-bedroom apartments were sold less actively.
“So far, we have not received any requests for ready-made renovated apartments from the developer. Customers continue to be interested in finished apartments even at the final stage of construction, which means that the trends that emerged with the outbreak of the war continue to exist,” he summarized.
The growth of effective demand in the “comfort+” category in the capital region is 3-5% per month, said Daria Bedia, Marketing Director of DIM Group of Companies.
“In liquid projects in the comfort+ category in the price range of $1300-1500 per square meter with stable construction dynamics and a high-quality concept, the monthly increase in effective demand is 3-5%,” Daria Bedia told Interfax-Ukraine, citing data from the company’s analytical report.
According to her, the positive dynamics since the end of spring is a good signal and indicates that buyers are now ready to invest in a comfortable and safe living environment in Ukraine that will fully meet their requirements and expectations.
These requirements, according to Bedi, include a well-thought-out concept that takes into account different life scenarios in both the spatial zoning of the territory and the filling of functions. A diverse multifunctional infrastructure that reflects the expectations of the target groups of buyers, a well-thought-out apartment layout and a variable range of planning solutions, energy independence of the complex, in particular, the availability of alternative power sources for water supply or power for elevator equipment, a customer-oriented service company and an access control system are mandatory.
“The level of demand is directly influenced by the concept of the project itself, the stage of construction, and especially the real construction dynamics at the site, the developer’s reputation, and flexible purchase terms, both in installments and 100% payment,” explained the marketing director of DIM Group.
Today, most buyers in the comfort+ segment are interested in one-bedroom apartments of 40-47 sq. m. with a kitchen-living room of 20 sq. m. and a separate bedroom with a dressing room. The top two-room apartments are 68 to 75 sq. m. with two separate bedrooms, a kitchen-living room of 20 sq. m., three-room apartments of 85-90 sq. m. with three separate bedrooms, one of which is a master bedroom with its own bathroom and wardrobe, a large kitchen-living room is also a priority.
Daria Bedia added that transactions for the purchase of business class apartments with an average price of $2 thousand per square meter have become more frequent in the primary real estate market. At the beginning of the fall, business class accounted for 25% of sales, although in the spring this figure was 15%.
DIM Group was founded in 2014 and consists of six companies covering all stages of construction. To date, it has commissioned 12 buildings in six residential complexes with a total residential area of over 218 thousand square meters. Six residential complexes of “comfort+” and “business class” categories are under construction: “New Autograph, Metropolis, Park Lake City, Lucky Land, etc.
DIM Group of Companies has joined the program of restoration/compensation of destroyed housing from the Ministry of Community Development of Territories and Infrastructure, the press service of the company reported.
As reported, from November 5 begins the issuance of housing certificates for exchange for new housing for Ukrainians whose housing in the non-occupied territories as a result of Russian aggression was destroyed. Objects for the purchase of housing on certificates can be already built or objects at the final stage of construction.
DIM Group of Companies will work with all financial institutions that will lend under the state programs, these are state banks, Oschadbank, Sense, PrivatBank, and commercial banks.
Ukrainians will be able to realize their housing certificates in the residential complexes Metropolis and Lucky Land, located in Kiev and the countryside complex Park Lake City in the village of Podgortsy, Kiev region.
As it was reported, since August 1 in “DII” started accepting applications under the program “eVidnovolneniya for compensation for housing destroyed because of the war. Compensation will be paid to sole owners of housing, which was destroyed due to hostilities after February 24, 2022, is not subject to reconstruction and is located in the non-occupied territory and not in the zone of active hostilities. As of the beginning of November, more than 5 thousand applications for compensation for destroyed housing have already been received, and a fifth of them have already been processed, having approved the issuance of 422 housing certificates for a total amount of UAH 811 million.
DIM Group was founded in 2014 consists of six companies covering all stages of construction. To date, it has commissioned 12 houses in six residential complexes with a total residential area of more than 218 thousand square meters. Six residential complexes of “comfort+” and “business class” category are under construction: “New Autograph”, “Metropolis”, Park Lake City, Lucky Land and others.
