Ukrainian developers have concluded the first housing purchase and sale agreements using housing certificates issued as compensation for destroyed housing under the eRestoration program.
Today, housing certificates are used to purchase apartments in completed projects, Anna Laevska, commercial director of Intergal-Bud, told Interfax-Ukraine.
“Buyers are mostly focused on affordable housing in the economy and comfort segments. As of now, ready-made apartments in buildings that have already received a certificate of commissioning are available for participation in the program in the capital region. However, we plan to expand the offer with facilities under construction. We are talking about projects in Lviv,” she said.
According to Laevska, the first transaction under the program concerned a two-room apartment with turnkey renovation in the Syretsky Gardens residential complex.
According to the developers interviewed by Interfax-Ukraine, buyers with certificates are offered installment purchases and loans, the possibility of using the certificate as a down payment, and in some cases, individual offers and discounts.
Developer Alliance Novobud has also concluded the first deal under the eRestoration program: a family from Kyiv region purchased a three-bedroom apartment in a finished building in the Madison Gardens residential complex in Brovary using a housing certificate.
“There are requests, certificate holders are interested in different formats and classes of housing. With the eRestoration certificate, you can purchase any residential property in all Alliance Novobud projects. We have individual offers for each individual request. For example, a discount, installment plan, or lending for the remaining amount by partner banks on special terms,” said Iryna Mikhalova, CMO of Alliance Novobud.
According to the press service of Kovalska Real Estate, when buying a home using a certificate in the developer’s projects, all available promotions and discounts are available to customers, including a loyalty program for military personnel and rescuers. There is also an option to purchase by installments at 0% for up to 3.5 years for an amount exceeding the value of the certificate.
According to the company, customers are interested in purchasing two- and three-bedroom apartments in ready-made buildings. At the same time, in January, apartments were already reserved for two certificates.
The developer also expects to expand its offer with the help of newly constructed facilities.
“At present, the certificate can be used to purchase an apartment in three commissioned houses by Kovalska. We are actively working, and soon it will be possible to apply the certificate to the objects under construction,” the company explained.
The DIM Group also offers to use installment purchase programs from the developer for up to five years if the amount of the certificate does not exceed the cost of the selected apartment. The program covers both already built residential complexes in Kyiv and the region and buildings at the final stage of construction.
“We are already working with the first applications from certificate holders who have chosen an apartment in our residential complexes and applied for a deposit. In the near future, we are waiting for the approval of applications and the receipt of funds,” said Daria Bedia, Marketing Director of DIM.
In general, the surveyed developers assess the housing certificate program with cautious optimism, noting its social importance.
“This is a very important government initiative aimed at helping Ukrainians who lost their homes during the full-scale invasion. It is difficult to overestimate the social component of eRestoration. However, it is difficult to predict whether the certificates will have a significant impact on the primary real estate market,” said Ms. Laevska.
According to the expert, the certificate program can be developed following the example of the eOselya affordable mortgage program, where the share of transactions in the primary market is no more than 2%.
At the same time, with competent support and uninterrupted financing, the compensation program can become a powerful market driver, according to Alliance Novobud.
“Government programs such as eHouse and eRestoration can have a significant impact on the demand and purchasing power of Ukrainians. For example, under the eHouse program, some projects account for up to 40% of sales of the total volume. The new construction market has high expectations for eRestoration,” summarized Mikhaleva.
As of January 31, 462 certificates for UAH 1.1 billion have been sold under the eRestoration compensation program, and another 311 have been booked. The total number of applications for compensation is 9.3 thousand, and 2.6 thousand certificates have been issued.
As reported, on May 10, 2023, Ukraine launched the eRestoration program, under which owners of damaged housing began receiving compensation of up to UAH 200,000 for repairs.
On August 1, 2023, Diia started accepting applications for compensation for housing destroyed by the war. Compensation will be paid to individual owners of housing that was destroyed due to hostilities after February 24, 2022, is not subject to restoration and is located in the unoccupied territory and not in the area of active hostilities. On December 27, 2023, the issuance of housing certificates in Diia began.
In May 2023, the Cabinet of Ministers allocated UAH 4 billion 433 million 350.0 thousand for compensation under the eRestoration program, in November – another UAH 1.5 billion for compensation for damaged property and UAH 2.5 billion for certificates for destroyed property.
