The results of 2019 in the real estate market of Kiev: the market was “stormy”, prices have changed significantly
The real estate market in Kiev has been active throughout 2019. At the same time, the price situation, supply and demand changed. About what happened in the past year, learned the portal of metropolitan real estate 100realty.ua.
Main factors of influence: exchange rate and elections
In 2019, a number of factors influenced the primary housing market, including strengthening of the hryvnia and political processes in the country.
“The depreciation of the dollar has frozen the real estate market – not completely, but quite noticeably.The cost of construction in the hryvnia did not fall, and the purchasing power remained at the same level. Accordingly, the dollar budgets of developers are already cracking at the seams. And the most interesting thing is that when the dollar starts to grow, we will see another rise in price in the residential real estate market, ”said Andrei Ryzhikov, CEO and managing partner of the development company DC Evolution.
Other experts have a similar opinion. “Due to the fact that prices in the primary housing market are tied to the dollar, naturally, this could not but affect the cost of apartments. So, in January, after a sharp jump in the dollar exchange rate to 29 hryvnias, in most buildings under construction, the cost of housing increased by 3-5%. Gradually, due to the stabilization of the exchange rate and the “rollback” to the level of 26-27 hryvnias, prices fell slightly. At the same time, the growth in the cost of building materials and construction and installation works amounted to an average of 10%. But after a significant strengthening of the hryvnia, taking into account the cost of construction, prices more or less remain stable, ”says Alexander Panfilov, commercial director of the mini-city of Svitlo Park.
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Almost all market players call exchange rate fluctuations – one of the most important factors that led to the actual increase in prices. So says Roman Belik, co-owner and partner of InCo home, a real estate investment company: “The revaluation of the hryvnia, as a result of the government’s borrowing policy, has become one of the reasons for the slowdown in sales in the market. Ukrainians traditionally keep their savings in foreign currency, and the strengthening of the hryvnia led to a rise in real estate prices by almost 20% in dollar terms, which naturally squeezed demand. The negative pressure of the devaluation is aggravated by the uncertainty regarding the implementation of the declared tax, structural and administrative reforms. The real estate market, as, indeed, all other markets, in moments of uncertainty with basic concepts and government values comes into a state of turbulence. For the second year in a row, the market is in the stage of oversaturation, when demand is clearly behind the supply and this cannot but put pressure on its dynamics. ”
The pricing situation this year was significantly affected by the political situation in the country: buyers took a wait-and-see attitude, and their subsequent market activity was largely dependent on the results of the presidential and Verkhovna Rada elections.
Yana Litvinchuk, MRICS, deputy managing director of the international consulting company Cushman & Wakefield in Ukraine, noted that among the main trends of the year, it is necessary to highlight:
Rising prices for new housing (up to 10-15% in dollar terms, depending on the class and stage of readiness of residential complexes). Despite the stabilization of the hryvnia exchange rate, it would be correct to tie up to the purchasing power of the national currency and inflation – up to 10%, which can be considered as the minimum equivalent increase, further price dynamics are already correlated and correlated with other market factors.
In 2019, according to the Ministry of Justice, the total number of transactions decreased. This can be explained by the period of uncertainty associated with the elections in Ukraine, as well as changes in political elites.
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Changes were observed in the residential real estate market of the suburbs, cottage real estate.
Buying cottages in the suburbs, you could earn 1.5-2% more than last year. On average, the yield on the purchase of cottages increased to 12-18% per annum, depending on the characteristics of the property. Most of all, profitability increased in cottages, which are located at a distance of 10 km from Kiev. Such data are provided by Vladislav Kononov, Managing Partner, AVM Development Group.