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.
The US real estate market continued to normalize at the end of last year, with falling mortgage rates leading to a slight decline in prices, while a number of key indicators approached seasonal norms, according to data from Zillow, an online home sales and rental service.
Only a little more than a quarter of homes (28%) in the United States were sold above the originally listed price in November, Zillow data showed. Data for December is not yet available. This is the lowest figure since June 2020, when the housing market had just recovered from the initial shocks of the coronavirus pandemic and began to warm up. Meanwhile, the figure still remains higher than in November 2019, when the share of homes sold above the declared value was 21%. “The decline in mortgage rates has begun to help renew interest from buyers. If rates continue to decline this spring and buyer activity is in line with the seasonal norm, this year could be a normal or even boring one for the market,” said Jeff Tucker, senior economist at Zillow.
The standard time for a property to be on the market before receiving an offer is currently up to 30 days. This is significantly longer than last December, when the figure was 13 days, but much less than the 43 days in December 2019, before the coronavirus pandemic. The longest time to sell a property was recorded in Austin (68 days), Las Vegas (57 days) and Phoenix (55 days). At the same time, the fastest transactions were made in Hartford, Connecticut, Cincinnati and Kansas City. Monthly mortgage costs are currently about $1.8 thousand for average homes after a 20% down payment, which is more than $100 lower than in October, when the peak level was reached. Meanwhile, the figure is still 62% higher than in December 2021. Problems with housing affordability are weakening demand, Zillow notes.
Some 20 new residential complexes appeared in the primary housing market in the business and premium class segment in 2020, increasing their share in the overall market structure by 4 and 1 percentage points (p.p.), respectively.
“Now the market knows about almost 90 business class residential complexes compared to the supply of 70 residential complexes at the end of last year, thus the share of this class in the market structure rose by 4 points (up to 29%), and the share of premium class by one point (up to 6%). There is a growing trend towards better and more comfortable housing,” NAI Ukraine told Interfax-Ukraine.
So, according to its data, up to 30% of layouts in the supply of business and premium projects are options with increased comfort, providing for the presence of terraces, apartments with improved view characteristics, increased areas, penthouses and two-level housing. The increased areas of premises allow the use of various functional and design solutions.
For example, an average two-room business class apartment has an area of 70-80 sq m, and premium up to 90 sq m. Three-room apartments range from 90 to 150 sq m, and it is here that consumers’ demands are concentrated.
“The main discovery of AIA Home Design Trends Survey, which summed up the U.S. housing market in 2020, was the catastrophic drop in popularity of dense buildings and smart solutions, and among the design trends – the increased size and number of windows. Significant spending time at home due to the pandemic and remote work prompted many to reconsider their housing requirements in favor of increasing the area, space, attractiveness of the environment. These trends are equally relevant for the Ukrainian market,” Maryna Hurevych, the head of the consulting department at NAI Ukraine, said.
Average price of one square meter on the primary housing market in Kyiv by the end of 2019 could grow by 9% compared with the previous year, to $1,350, reaching the pre-crisis level of 2014. “Starting from the autumn, in the event of political stabilization, sales are expected to increase, and by the end of the year, prices will rise to the pre-crisis level of 2014,” Analyst at City One Development, a full-cycle development company, Olena Shyrin told Interfax-Ukraine.
According to City One Development, the growth of prices in the market in the first half of 2019 was facilitated by the stabilization and strengthening of the hryvnia exchange rate.
So, the average market price in the first half of the year was $1,296 per sq. m.
According to the company’s estimates, during the second quarter of 2019, sales began in nine new housing complexes with a total announced number of apartments of about 3,500. At the same time, six of them are of the business class, two are comfort and one of the economy class.
“In general, despite the elections and political instability, in the first half of 2019, the primary residential real estate market was expanded with 25 new residential complexes (taking into account the launch of 16 new residential complexes in the first quarter of 2019). Of these, seven are in the Pechersky district, presented in the business class,” City One Development said.
Prices in the primary housing market in Ukraine in 2018 increased by 0.7% compared with 2017, in the secondary market by 0.5%, the State Statistics Service has reported. According to the agency, the data are provided excluding the temporarily occupied territory of the Autonomous Republic of Crimea, the city of Sevastopol and part of the JFO area. According to the report, the largest rise in prices in the primary housing market was observed for one-room apartments – by 1.8%, while prices for three-room apartments rose by 1.7%, and two-room apartments fell by 0.9%.
Prices for two-room apartments in the secondary market in 2018 increased most of all – by 2.7% (compared to 2017), three-room apartments by 1.2%, while one-room apartments became cheaper by 4%.
