The cost of construction and installation work in Ukraine has increased by 35% since the beginning of 2023 amid a shortage of personnel that has reached 40% in some companies, Oleksandr Nasikovsky, managing partner of DIM Group, told Interfax-Ukraine.
“There is a real shortage of highly qualified personnel. Today, there is an acute shortage of monolithic workers, crane operators, painters, and electricians. In some markets, the shortage in companies reaches 40%, which significantly affects the industry. Since the beginning of the year, the cost of construction and installation work has already increased by more than 35%, which is due to both inflation and a shortage of personnel. I think we will see growth of at least 5-7% in this category by the end of the year,” he said.
Nasikovsky emphasized that the availability of labor and skilled personnel is critical for the recovery of Ukraine, where more than 170,000 residential buildings, 19 airports, approximately 130 railway stations, 3,400 educational institutions and other facilities have been damaged or destroyed. Ukraine is facing an important challenge to ensure the availability of skilled construction workers to rebuild and develop the country, and this requires decisive action and support at all levels.
“We really need a system of motivation at the state level that would encourage young people to study for production specialties and support those who choose the construction industry for professional realization. It could be social incentive systems (social mortgage programs, for example) or additional financial incentives,” Nasikovsky said.
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.
Since the beginning of autumn, the primary real estate market has seen an increase in transactions for the purchase of business class apartments with an average price of $2 thousand per square meter, Daria Bedia, Marketing Director of DIM Group, told Interfax-Ukraine.
“According to our analysts’ research, business class now accounts for 25% of the sales structure, although this figure was 15% in the spring. Such signals are encouraging, so we expect an increase in demand this fall. Of course, everything will depend on the news at the front, the frequency and consequences of shelling in the capital and possible power outages. We are also well aware that this category of buyers is likely to leave Ukraine for the winter in late fall,” Bedia said.
According to her, the level of demand is directly influenced by the project itself and its concept, stage and activity of construction. Important criteria include the developer’s reputation, ability to keep its word in terms of deadlines and promises, as well as flexible purchase terms in case of 100% payment and installments. Much attention is paid to the type and quality of materials, spatial zoning, landscape design, service company, security and concierge services. People who choose business class value a sufficient number of parking spaces and an underground parking lot with an elevator to the residential floors.
According to DIM Group analysts, apartments with the correct layout are in high demand, more often either classic layout solutions or Euro-formats with spacious kitchens-living rooms and isolated private rooms.
The area of one-bedroom apartments, which are most often bought in the business segment, reaches 50-55 sq. m, two-bedroom apartments – 75-80 sq. m, three-bedroom apartments – 100-120 sq. m. According to DIM’s Marketing Director, the mandatory attributes of such apartments are a large living area with panoramic windows of 30 sq. m. or more, a master bedroom with a dressing area and a separate bathroom of 20 sq. m., and a children’s room of 25 sq. m. or more with a wardrobe.
At the same time, the tendency to reduce the average area of purchased apartments continues.
If earlier, according to her, in the business class were interested in three-bedroom apartments in the range of 120-150 sq. m., now up to 120 sq. m.; while two-bedroom apartments are now more in demand in the range of up to 85 sq. m. against 85-100 sq. m. earlier. Only the demand for one-bedroom apartments has not changed at the level of 50-55 sq. m.
“The average area of apartments in terms of demand decreased by 10-15%. But the bulk of the sold objects were designed before the war, so developers still have large apartments that are not very interesting to buyers. After all, the total purchase receipt is more important nowadays. Therefore, developers offer more flexible terms for large apartments in terms of installments and discounts,” Bedia summarizes.
DIM Group was founded in 2014 and includes six companies covering all stages of construction. So far, it has commissioned 12 houses in six residential complexes with a total living area of over 218 thousand square meters. Six comfort+ and business class residential complexes are under construction: “New Autograph, Metropolis, Park Lake City, Lucky Land, etc.
In September on the primary housing market in Ukraine there is a gradual increase in demand and the number of investment transactions, said the conceptologist of the group of companies DIM Alena Piskunova. “Since May of this year we can confidently say that buyers are increasingly returning to the real estate market. Not in such volumes, not with such sales rates, but the interest is growing. First of all, housing for themselves, where they consider houses at the final stages of construction with apartments with repair. However, since the beginning of September, we observe and gradual return of investment transactions”, – told Piskunova at a press conference in the agency “Interfax-Ukraine”.
Founded in 2014 GC DIM consists of six companies covering all stages of construction.To date, the GC has commissioned 12 houses in six residential complexes with a total residential area of more than 218 thousand square meters. m. Six residential complexes of “comfort+” and “business class” category are under construction: “Novy Avtograf”, “Metropolis”, Park Lake City, Lucky Land and others.
The British International School, Ukraine (BISU) and DIM Group have signed an agreement to create a modern educational space in the VITA neighborhood of Park Lake City, with construction scheduled to begin next year.
As Park Lake City co-founder Andriy Mishchenko clarified during a press conference at Interfax-Ukraine, negotiations with the British International School began before the full-scale invasion.
“The war has postponed our plans, but not stopped them. The first step of our cooperation – the construction of a kindergarten and an elementary school called Early Years Academy – will start next year,” he said.
He clarified that the VITA quarter’s infrastructure will include its own kindergarten, primary, middle and high schools, and campuses for teachers and children.
“While the war continues, preceded by a two-year global pandemic, we believe it is extremely important to provide children with a world-class education provided by certified international BISU teachers. Some of them stayed with us in Ukraine. School and learning have become a kind of symbol of resistance to Russian aggression. Our students are the younger generation that will restore the country, rebuild the nation and guide it to prosperity,” said Olena Tovkun, member of the Supervisory Board and Head of the BISU Admissions Committee.
She added that for 26 years, BISU has been constantly supporting British academic traditions and high standards of teaching.
The first stage of the BISU educational cluster, Early Years Academy, will be a two-story building with a total area of 2.9 thousand square meters. The academy is designed for 185 students.
DIM plans to start construction in 2024 and put it into operation in 2025. A 3-hectare plot has been reserved for the construction of a middle and high school in the next stages.
Construction of the Park Lake City business-class suburban residential complex began in 2019. The advantages of the residential complex include a picturesque area with its own pond, stylish architecture and a park area with rare plants. After the start of the full-scale invasion, the first phase, which includes four houses of the VITA quarter, was put into operation. The second phase of the complex, consisting of 12 buildings, is currently under construction.
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.
The British International School was founded in 1997 and was the first institution to initiate the British approach to education in Ukraine. Since the beginning of the invasion, BISU has not stopped its activities to ensure a continuous educational process. It is the only international school that has physically continued to operate in the country, in Kyiv’s Pechersk district and Dnipro, since September 1, 2022, offering bilingual education from kindergarten to graduate school. The academic course is based on a combination of British, international and Ukrainian curriculum and creative development activities. Graduates receive the Cambridge IGCSE, international IBDP or A-levels, and a Ukrainian certificate of basic and complete secondary education of the state standard.
Ukraine’s reconstruction should follow SMART principles and be man-centered, believes Alexander Nasikovsky, co-founder and managing partner of DIM Group.
“SMART principles (the goal should be Specific – specific, Measurable – measurable, Achievable – achievable, Relevant – meaningful, Time bound – timely) imply an integrated approach to the restoration of territories, focusing on engineering communications, infrastructure, social facilities and, of course, housing. Energy independence becomes a fundamental component of this approach,” Nasikovsky emphasized in his comments to Interfax-Ukraine.
According to him, DIM specialists have studied the experience of many countries, in particular Sweden, and developed geothermal pump systems for apartment buildings.
“This allows to save up to 40% on heating and reduce energy consumption by 35 kWh per square meter,” Nasikovsky explained, adding that elements of sustainable energy independence of DIM projects were also solar panels on places of common use and street lighting.
The key role in the rehabilitation projects, according to Nasikovskiy, will be played by infrastructure created in accordance with the real needs and desires of residents.
“The life of restored communities should be rich, so we developed the concept of community centers, educational hubs, and places for commercial initiatives that meet the real demands and needs of people,” added the DIM co-founder.
Implementing these ideas, he believes, requires collaboration between the public and private sector, analysis and consideration of behavioral trends and a shared understanding of the needs of today’s community.
“Recovery is a challenge, but we are ready to change lives for the better, taking into account the SMART principles and the efforts of all spheres of public life,” Nasikowski emphasized.
As reported, according to the research of the project “Russia will pay” at the end of June, the amount of damage to housing during the full-scale military aggression of the Russian Federation is $56 billion.
Founded in 2014, DIM GC consists of six companies covering all stages of construction.
To date, the GC has commissioned 12 houses in six residential complexes. Seven residential complexes of “comfort+” and “business class” category are under construction: Novy Avtograf, Metropolis, Park Lake City, Lucky Land and others.
DIM Group expects to increase the share of investors who make timely payments under installment agreements to 80-90% by the end of this year, while today their number is 50%, said Alexander Nasikovsky, managing partner of the group.
“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%,” Nasykovsky said in a column for Interfax-Ukraine.
According to him, the rapid resumption of construction work after a pause at the beginning of the full-scale invasion allowed for an increase in the number of timely payments under installment agreements. Thus, at the beginning of the active phase of the war, only 10% of investors paid by installments, while today their share has reached 50%.
In addition, to support and stimulate demand, DIM has developed a number of financial instruments: special terms of debt payment and early repayment, favorable exchange rate offers, and debt restructuring. In addition, the company launched a guaranteed yield program at 10% in US dollars and a trade-in program.
Despite the limited effective demand, housing prices were affected by rising construction costs, fuel prices and inflationary processes, Nasikovsky noted.
“In annual terms, we had almost 27% inflation. “Contracts and extensions, and sometimes radical changes in supply chains due to the loss of capacity of producers of a number of building materials in the southern and eastern regions and the relocation of many businesses, are also driving up the price tag. Over the past year, the weighted average cost of construction in housing increased by at least 45%,” he explained.
According to him, certain categories of building materials increased in price by 30-70%, most notably concrete, glass, plaster, wood, and iron.
In addition, the cost of labor has also increased significantly – by 37% on average, Nasikovsky added.
“Prices are growing 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 answer should be sought inside the market, not outside, relying solely on reparations or government support. The recovery and potential of the market will directly depend on the counteroffensive of the Armed Forces, 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 coincidence in their expectations in the price-value-construction time axis – real dynamics,” the expert believes.
Founded in 2014, DIM Group consists of six companies covering all stages of construction.
To date, the group has commissioned 12 houses in six residential complexes. Seven residential complexes of the comfort+ and business class categories are under construction: “New Autograph, Metropolis, Park Lake City, Lucky Land, etc.
