Business news from Ukraine

Business news from Ukraine

Housing sales in Ukraine in new buildings have recovered by quarter to pre-war levels

Sales of apartments in Ukrainian new buildings in the third quarter of 2023 recovered by 24% from the pre-war level, while demand for housing is already at 70-80%, according to a study by the LUN real estate portal.

“We compared the sales of developers with the figures for 2021. At the end of 2022, sales recovered to 11%. In 2023, sales grew rapidly and as of the third quarter recovered by almost a quarter to 24%. We see the market recovering in all segments in 2023. Now people are buying ready-made housing or with a commissioning period of up to 1 year. But it is already obvious that deferred demand is forming. In the absence of escalation, we can expect the market to stabilize,” said Olga Okhrimenko, LUN Sales Director, at the RED Online Meeting “Housing Market: Results 2023 and Forecasts 2024”.

According to the study, sales in Kyiv and Kyiv region are recovering at a slower pace and are currently at 17% of the pre-war level. At the same time, sales in Lviv and the region reached 42%.

To date, sales have been opened in 83% of residential complexes in Ukraine, and construction has resumed at 77% of construction sites, LUN notes. In December 2023, 916 residential complexes are under construction, of which 4% have already been sold out, 3% have not yet started sales, and 5% have stopped sales.

The largest number of residential complexes with open sales is in the Kyiv region: 230 in Kyiv and 182 in Kyiv region. Other leaders are Lviv region (238 objects for sale), Odesa (135), Ivano-Frankivsk (91), Khmelnytsky (88) and Ternopil (80).

According to LUN, after the start of the full-scale invasion, sales started in 275 residential complexes, most of them in Lviv region (79), Kyiv region (43), Ternopil region (29), Ivano-Frankivsk region (24) and Zakarpattia region (23). During this period, 294 residential complexes completed sales.

Okhrimenko noted that over the past six months, the issuance of mortgage loans under the eHouse program has been showing active dynamics, which has a positive impact on the demand for housing.

“As for the interest in buying an apartment, today it has recovered to the level of 70-80% after falling to 30% in February 2022. People are now interested in buying an apartment again, both in the primary and secondary real estate markets,” the expert said.

At the same time, the slow pace of housing commissioning may provoke a shortage of new apartments for participants in the 7% government program, under which the chosen house must be no older than three years. Thus, according to LUN, in January-September 2023, 15% less housing was commissioned in the capital than last year, 35% less in Kyiv region, and 38% less in Lviv.

Average prices for new buildings increased in almost all regions over the year, according to the study. Prices remained at the same level in Kyiv (UAH 47.3 thousand per square meter), Lviv region (UAH 35.8 thousand per square meter) and Dnipropetrovs’k region (UAH 39.2 thousand per square meter). At the same time, prices decreased by 6% (to UAH 33 thousand per square meter) in Odesa region, by 8% (to UAH 31.1 thousand per square meter) in Vinnytsia region and by 21% (to UAH 26.9 thousand per square meter) in Mykolaiv region.

The largest increase in average housing prices was recorded in Kharkiv region – by 35% (to UAH 28.3 thousand per square meter), Kirovohrad region – by 26% (to UAH 31.5 thousand per square meter), Khmelnytsky region – by 22% (to UAH 24.3 thousand per square meter).

According to LUN, Lviv holds the lead in terms of the high cost of new buildings with 48.5 thousand UAH/sq. m. This is followed by Kyiv at 48 thousand UAH/sq m, Uzhhorod at 41.5 thousand UAH/sq m, Dnipro at 40 thousand UAH/sq m and Odesa at 36.2 thousand UAH/sq m.

In the secondary market, average housing prices increase depending on the distance from the area of active hostilities, Okhrimenko noted.

“The farther the region is from the fighting, the higher the prices are. The exception is the capital. Many Kyiv residents are not returning yet and have not decided to buy housing. That is why Kyiv is not raising prices yet, and has even reduced them a bit,” she explained.

The largest increase in prices in the secondary market over the past six months was shown by Lviv – a “plus” of $6.4 thousand, up to $58.5 thousand for a one-bedroom apartment. Prices also increased significantly in Ivano-Frankivsk (+$4.7 thousand, up to $31.7 thousand), Chernihiv (+$4 thousand, up to $31 thousand) and Cherkasy (+$3.4 thousand, up to $38.4 thousand).

Average prices for two-bedroom apartments in the secondary market increased the most in Vinnytsia (+$8.9 thousand, to $59.9 thousand), as well as in Chernivtsi (+7 thousand, to $62 thousand), Lviv (+$7 thousand, to $87 thousand) and Cherkasy (+$7 thousand, to $57 thousand).

Three-bedroom housing on the secondary market has risen in price the most in Vinnytsia (+$8.8 thousand, to $75.8 thousand), Lviv (+$7.7 thousand, to $108.7 thousand), Ivano-Frankivsk (+$7 thousand, to $60 thousand). At the same time, the average price of three-bedroom apartments in the secondary market in Kyiv fell by $8 thousand to $135 thousand.

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