Business news from Ukraine

STATE YOUTH HOUSING FUND PURCHASES 100 APARTMENTS FOR IDPS

The State Fund for Support of Youth Housing Construction announced the purchase of housing for further leasing to internally displaced persons (IDPs) from large families whose housing was destroyed as a result of Russian aggression.
As reported in the release, a total of 100 apartments are being purchased: in Kyiv and Chernihiv regions, 35 each, in Sumy 20 and Zhytomyr 10.
Housing, renovated and furnished, can be purchased from individuals and legal entities-owners of such housing.
The minimum total area of housing is 31.5 square meters, maximum – 94.5 square meters.
As reported, by Resolution of the Cabinet of Ministers No. 495 of April 29, 2022, the procedure for the buyout, construction of housing for the purpose of transferring to internally displaced persons for temporary residence was approved.
The State Youth Housing Fund can purchase ready-made housing, provided that the cost of acquiring 1 square meter of the total area of housing (taking into account all mandatory payments paid by the buyer when purchasing housing) does not exceed the marginal cost.
The marginal cost is calculated based on the indirect cost of housing construction in the regions of Ukraine determined by the Ministry of Regional Development and increased for: cities – regional centers, cities of regional significance with a population of more than 300,000 people and settlements located in areas adjacent to the borders of cities – regional centers – 1.75 times; other settlements – 1.5 times.
For example, in February 2022, the Ministry of Regional Development approved an indirect cost for Zakarpattia region of UAH 13,892/square meter, and for Kyiv – UHA 18,704/square meter. This means that the marginal cost of housing ready for occupancy, which can be paid by the state or communities, in Uzhgorod is UAH 24,311/square meter, in Kyiv it is UAH 32,732/square meter.

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MEDIAN PRICE OF APARTMENTS IN SECONDARY MARKET OF UKRAINIAN CAPITAL REACHES $1,308 PER METER

The median price of apartments in the secondary market of Kyiv was $1,308 per square meter in July 2021, which is 13.7% higher than in the same period in 2020, the press service of the address.ua portal has told Interfax-Ukraine.
“In the secondary residential real estate market, a stable but moderate trend towards price increases remains – the median price increased by 1% in July 2021 compared to June 2021 and by 13.7% compared to July 2020,” City Development Solutions Director Roman Herasymchuk said.
At the same time, according to him, the median price of one-room apartments presented in the database of the address.ua portal increased to $1,400 per square meter (by 1.2% per month and by 17.7% per year), two-room apartments – to $1,301 per square meter (0.6% and 18.8%), three-room apartments – to $1,181 per square meter (less than 1% compared to June and an increase of 7.7% per year).
“The continuing rise in prices is due to objective long-term factors such as stable demand, good indicators of profitability of investments in real estate and a systematic rise in the cost of construction, allows the secondary market to compete with the primary market, the volume of finished housing on which is not sufficient to meet the needs of the population in square meters,” Herasymchuk said.
According to him, in July, apartments in the price range of up to $30,000 were in high demand – 33% of requests to the database of the address.ua portal. The interest for housing in the range from $50,000 to $70,000 was in 29% of inquiries, from $30,000 to $50,000 in 21%, and over $70,000 in 17%.
Some 42% of inquiries to the database of the address.ua portal concerned one-room apartments, 37% of portal users were looking for two-room apartments, and 19% for three-room apartments.
At the same time, the greatest demand (38%) was for the category of apartments with an area of 50-80 square meters, 37% of requests were for apartments with an area of 35-50 square meters, 20% were interested in apartments up to 35 square meters. Housing over 80 square meters were interesting only for 5%.
“In the coming months, we can expect an increase in market segmentation – the main demand is for new housing built in the 2010s, which increases the discrepancy in prices between the old and new housing stock,” Herasymchuk said.
According to the expert, the main factor holding back the price growth is the pool of less liquid apartments in the old housing stock, which accounts for more than half of the current supply.
Herasymchuk predicts that the trend towards price increases in the coming months will continue.
The results of the study of the secondary real estate market in Kyiv for July 2021 are based on the analysis of ads posted on the real estate search portal address.ua, as well as user activity (479,519 visits in July 2021).

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Fomich Group plans to build apartment complex in Bukovel

Fomich LLC (Ivano-Frankivsk) plans to complete the construction of the Fomich Apartments complex in Bukovel (13 Urochysche Vyshnia [Cherry Stow], Polianytsia village, Ivano-Frankivsk region) by the end of January 2022.

As indicated in the presentation of the complex on the company’s website, the total area of the complex will be 4,800 square meters, of which 236 square meters are occupied by a bar and a swimming pool, and 430 square meters by recreation area. The project includes 54 rooms and parking for 58 cars.

According to Fomich Group, the cost per 1 square meter in the project will amount to $2,000. The company offers investors the conclusion of a management agreement for a period of five years.

The company is also completing the implementation of the Villas Fomich cottage complex project. According to the website, the complex is at the stage of commissioning and will be available for booking from February 1.

The cost of one turnkey cottage in the Villas Fomich project is $295,000, while the company guarantees a return on investment in seven years.

The Fomich Group also owns and manages the F&B Spa Resort.

Fomich LLC was registered in 2012. According to the Unified State Register, the founders of the company with a charter capital of UAH 1.5 million are Vasyl Yatsenyuk and Tetiana Krasiy.

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SHARE OF BUSINESS AND PREMIUM CLASS HOUSING IN KYIV UP TO 35% IN 2020

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.

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2,473 PREMIUM CLASS APARTMENTS FOR TOTAL OF $419 MLN WERE SOLD IN KIEV IN 2019

Some 2,473 business and premium class apartments for a total of $419 million were sold in the primary market of Kyiv in 2019, while new De Luxe class objects are expected to enter the highest price segment of the market in 2020, according to a review by Kiev Standard. “In 2020, we pin our hopes on the De Luxe segment, which is new for the Kyiv market. According to our data, work is already underway on several projects in this class among the leading developers. The projects themselves, due to a lack of a similar supply and competition, will form a new level of demand in the high price segment,” the review says.
As a whole, in 2019 elite apartments with a total area of 217,000 square meters were sold in the capital. Of these, 25,000 square meters (181 apartments) were presented in the premium class, 192,000 square meters (2,292 apartments) in the business class.
According to Kiev Standard’s estimates, the volume of new elite housing supply in 2020 will amount to 4,000 apartments with a total area of 350,000 square meters.
As expected, foreign investors, who were previously not interested in the Ukrainian real estate market, will have a positive impact on the demand indicators in 2020.
“Negative rates on deposits in Western banks will force to consider new options for investments, including the primary real estate market of Kyiv. Unlike local investors, foreign ones are considering long-term investments,” the report says.
According to the report, in 2019 sales in 15 objects started in the market, 13 of which are new projects. The volume of the new offer amounted to 4,780 apartments with 367,900 square meters.

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