The trends of the real estate market in the first half of 2024 were analyzed by Oleksandr Nasikovsky, Managing Partner of DIM Group of Companies.
The number of sales transactions in the first half of 2024 is gradually increasing compared to the same period in 2023. But it all depends on the readiness of the object and its class.
Currently, the majority of buyers of apartments in the primary market are those who buy housing for themselves. These are people who associate their future with Ukraine, with Kyiv. In this case, it makes no sense to postpone this step, because developers are now offering good conditions and trying to keep prices down. Most of these people lived and planned to buy housing in the capital even before the war.
There are also IDPs among the buyers, but their share has not increased significantly. They have more stressful circumstances, a longer period of adaptation, and need more time to take this step. In addition, some of them are considering the western regions of Ukraine for purchasing housing.
While in 2023, there were few investment transactions for the purchase of real estate for resale or lease, in 2024 we are already seeing a gradual recovery in investor interest as the real estate market is gradually recovering.
For new clients, realizing the difficult decision they are facing today, we are developing special programs for the purchase of housing: we offer installment plans for a long period (up to 5 years), reduce the down payment, offer to pay part of the funds before the completion of construction, and the rest within three years after.
We can state that the cost per m2 of primary real estate will continue to grow. This is due not only to the future growth in demand for new housing, but also to the rise in the cost of building materials, energy, and related resources required for the construction of houses.
Yes, there is pent-up demand and it has a cumulative effect. Ukrainians still have a need for new housing, but not everyone is ready to invest in real estate in the capital. People are hindered by understandable fears, lack of stability and confidence in the future due to the war. But as soon as we win, people will return to solving the housing issue, because it is still relevant.
Internal migration within the country will also have an impact. Some people will stay and build their future in Kyiv.
Investors will be interested in the future growth of the cost per square meter. After the Victory, this process will start quite quickly.
The cost of apartments in high-quality facilities will increase. This is due not only to the future growth in demand for new housing, but also to the rise in the cost of building materials, energy, logistics, and related components required for the construction of houses. So far, we have been able to balance, but over time, these factors will take their toll and prices will go up.
DIM Group has commissioned two construction projects – the first complexes of the eco-city Lucky Land and the residential complex Novy Autograph, with a total of 1060 apartments, the company’s press service reports.
“Like all developers today, we face many obstacles. However, we are making every effort to fulfill our obligations to our customers. Many people in the country are left without homes. That is why it is important to build new houses today,” said Oleksandr Nasikovsky, Managing Partner of DIM Group.
It is reported that DIM continues to increase the pace of construction, with more than 100 thousand square meters of housing planned to be commissioned by the end of the year.
The Lucky Land residential complex is a modern eco-city of seven blocks in Kyiv, which corresponds to the multifunctional live-work-play format. At the end of January 2024, DIM put into operation sections 1, 2, 3 of the third stage. House No. 3 received its own postal address – 4D Berkovetska Street. In April, DIM will complete the production of technical passports and start handing over apartments to owners in May.
In March 2024, the New Autograph comfort class residential complex received a certificate of readiness. The complex consists of two buildings with 18-26 floors and 810 apartments, and its utilities include artesian water supply and individual heating. The area around the residential complex has a well-developed infrastructure – from children’s and sports grounds to commercial facilities and underground parking.
A number of other projects by DIM are under active implementation. In particular, the construction of the 33-storey A136 Highlight Tower multifunctional complex is underway. Recently, it was the first in Ukraine to be audited by CBRE Ukraine, the largest international investment consulting and real estate management company. The international auditors confirmed the overall completion of 54% of the works. Given the pace of construction, the complex will be completed this fall.
During the year, DIM also plans to complete the construction of the third building of the Metropolis residential complex, as well as commission five buildings of the Park Lake City eco-city located 15 minutes from Kyiv.
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 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, A136 Highlight Tower, Olegiv Podil.
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.
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.
