Real estate market in Ukraine is maturing, and with the stable hryvnia exchange rate there are new trends in regard to where locals prefer to buy residential property. In 2020 prices for real estate in Ukraine are likely to both drop and grow, depending on the class of the development and the age of apartments.

Real estate in Ukraine: 2020 trends

Experts in real estate have noticed two major new trends in Ukraine, Segodnya.ua reported.

1. Purchasing apartments in newly erected buildings as opposed to lived in units

There are two driving forces for such a switch: First, the Ukrainian hryvnia became stronger against the major currencies in 2019; and second, older units are just too worn out, which makes renovations too costly as compared to buying brand new.

The transactions on the secondary market are usually conducted in US Dollars, while units in newly erected buildings are sold in Ukrainian hryvnia. Because of the drop in the USD value due to fluctuations in the exchange rate, it’s more sensible to purchase new properties as opposed to old. Prices in USD are 10% higher than the last year, and in hryniva they have only grown by about 3%. In some locations new units had been even discounted.

2. People with money are pickier and seek great infrastructure

The people who can afford it are now looking at developed infrastructure of the area, as opposed to simply the size of the apartment and its price.

In today’s market, newly built apartment towers that are located in aged neighbourhoods among older buildings erected during the times of the Soviet Union, with their lack of parking spaces, kindergartens, schools, and shopping centres, are seen as less attractive as compared to constructions where the whole area is freshly developed to a higher standards of comfortable living.

Such complex developments offer a much more comprehensive infrastructure and proximity to public and commercial services.

The future of residential development in Ukraine

From 239 complexes scheduled to be completed in Ukraine in 2020-2022, about 30% are developed to the standards of “Comfort+” or “Business+”.

A brand new format of development in Ukraine that is on offer allows for a seamless “live-work-play” transition, where a development includes not only living quarters, as in the past, but also spaces for shopping and retail, offices, child care, supermarkets, underground and visitor parking, as well as concierge services.

Another concept named “City in the city” is targeting development of local areas that are totally self-sufficient, including recreational facilities for locals.

The multifunctional residential developments are built and equipped in a uniting style.

Some ecologically sound projects are purposefully developed with the view to minimize the impact on the natural environment and resources.

A brand new format of development in Ukraine that is on offer allows for a seamless “live-work-play”.

Investors seek completed projects

The times of popularity of buying “off the plan” have definitely passed, experts point out.

Smart investors, many of whom lost money by paying deposits on apartments and office spaces that have never been built, are now passing the opportunities to purchase cheaper before the construction is completed and favouring the finished product.

Investors are advised to look at options to balance discounts with a higher security and consider developments where at least 60% of the funding of the project is already invested in the construction.

Such projects still offer sizable discounts, while the probability of completion is getting closer to 100%.

The problem with failed developments was precisely due to high pre-sales. Developers were investing only 30-40% of their own money, while the remaining 60-70% were received from the funds paid by future owners. But with the galloping inflation and constant growth in prices for labour and materials it wasn’t possible to complete the project according to the initial budget.

Real estate prices in Ukraine

Kyiv (Kiev) remains the most expensive location in Ukraine.

• In 2019 the average cost per square meter in newly developed residential apartments in Kyiv went up by 3% and now stands at 23,700 hryvnia (USD 4,000).
• Residential apartments of the economy class are priced at 18,300 hryvnia per square meter (USD 3,090).
• Units of the comfort class cost 20,600 hryvnia (USD 3,480) per meter.
• Business class apartments are priced at UAH 25,000 ($4,223) per meter.
• Units of elite class are valued at UAH 60,500 ($10,220) per square meter.

However, in other Ukrainian cities with the population 1 million plus real estate prices went down due to strengthening of hryvnia, and the lack of demand in the presence of a lot of supply.

• Lviv recorded 3.77% drops in prices: 15,300 hrvynia ($2,584) per M2.
• Odessa (Odesa) prices dropped by 6.84% to 17,700 ($2,990) hrvynia per M2.

Kiev is still the most expensive real estate in Ukraine.

Experts’ predictions for 2020

Professionals predict that growth in prices of real estate in Ukraine will in general continue in 2020, however, not all the locations will enjoy it.

• Andrey Miroshnik from Activitis believes the prices will rise by 7-10% during the next 12 months.
• Tatiana Shulga-Zabelskaia from RED Community feels that the demand for new units is 30-40% lower than what the supply is going to be. Therefore, 2020 is going to be the year of strong competition to get buyers. She predicts that the apartments of the economy class may drops in price by 5-8%. However, within the new formats of development, the prices may rise by 5-7%.

The actual real estate prices in Ukraine in 2020 will be strongly affected by the exchange rate between hryvnia and US Dollar. In case of the dollar gaining up against the Ukrainian currently, the prices will most definitely go up.

Read also:

• How much does it cost to rent an apartment in Kiev?
• Best hotels in Kiev, Ukraine
• Population of Ukraine, 2019 — official statistics
• Mortgages in Ukraine