Business news from Ukraine

Real estate market in Ukraine is unbalanced – National Bank

The Ukrainian real estate market is unbalanced, amid low demand and declining new supply, reported prices from developers are growing, while rental prices are falling, according to the National Bank of Ukraine (NBU) Financial Stability Report for December 2022.
It notes that demand for housing remains weak and unstable: the interest of few buyers depends on the intensity of the shelling of settlements and decreased again in the fourth quarter.
The existing demand is focused primarily on ready-made housing for residence, almost zero speculative for the purpose of further resale or lease.
The number of new buildings under construction is slowly increasing after an almost complete standstill in the first months of the war. In the country as a whole, work has resumed on more than two-thirds of sites, mostly in housing complexes in the final stages of construction. At other sites the resumption of work has occurred only on paper.
According to the State Statistics Committee of Ukraine, for the three quarters of 2022 completed construction of 2.8 million square meters. m multifamily housing. As noted in the report, this is half the record for the same period in 2021 and only a quarter less than the average of the previous five years.
Much worse is the situation with the start of new projects. In the first nine months of this year, developers received permits to build half as many multifamily units as the average for the same period of the previous four years. However, obtaining permission is not an indication of the start of construction – the actual start of construction work can be delayed for a long period.
The report also reminds us that, according to the “Russia Will Pay” project, more than 16,000 apartment buildings and almost 127,000 private homes have been destroyed or damaged since the start of the full-scale war until November.
The low activity of the primary real estate market, together with the significant amount of housing damaged by the shelling, will lead to a reduction in the supply of housing in the near future, and in the future to a possible shortage of housing. At the same time, the declared purchase prices are mainly increasing, while the rental prices remain almost twice as low as before the war.
The report states that the multidirectional price movements reflect an imbalance in the real estate market, relatively cheap rents will deter demand for the purchase of housing.
The price-to-rent ratio has risen substantially since March and is now at an all-time high. In terms of price, renting seems to be a better alternative than buying, and this situation will persist for a long time.



The war caused and continues to cause significant damage to the economy of Ukraine. Today, perhaps, the construction and real estate markets suffered the most from the hostilities. Thus, the report of the National Bank of Ukraine “On Financial Stability” dated June 17, 2022 indicates that since the beginning of the war, the market has practically stopped, both in terms of construction and the sale of housing. At the same time, according to the NBU, the situation has begun to level off in recent weeks, and above all in the regions that are least affected by the destruction from the war.


The most favorable situation is in the western regions of the country, while the National Bank notes that a number of significant problems remain there. First of all, this is a market imbalance, when the prices declared by sellers are not supported by demand and are supported artificially.

As for construction, here, according to the regulator, the situation is more optimistic. Developers have restored work on almost 50% of the facilities in the country. The most positive dynamics is observed in the western regions, in the center and in the Odessa region.

As for the office real estate market, according to the NBU, it suffered to a greater extent from the massive transition of staff to remote work.

The Open4business portal asked financial expert Igor Stakovichenko to comment on the current situation. In his opinion, the severity of the crisis in the real estate market directly depends primarily on the intensity of hostilities in various regions of the country, as well as on the well-being of the population.

“We see that the demand for housing in the same Kharkiv and Dnipro collapsed almost equally. At the same time, housing construction in Kharkiv is at a standstill, while in Dnipro it is being restored. This is due to the risk assessment by developers, since the Kharkiv region is now under devastating shelling by the aggressor,” the expert believes.

In his opinion, most of the prices in both the primary and secondary markets are dictated by the overestimated expectations of developers who continue to hope to find a buyer for their goods despite changes in the economy and a decrease in the income of part of the population.

“Builders think in the old way, and form the price based on the cost and those mark-ups that were fair in the pre-war period. Buyers have become much more cautious and assess the risks, in particular, the presence of bomb shelters, evacuation routes, and so on. As for the secondary market, here prices are often drawn from the ceiling, hoping more for luck, ”said Stakovichenko.

According to the expert, market recovery can be expected after the end of the war, when the demand for housing will increase and investors’ fears will decrease.

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