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Forecast for the real estate market: how much will housing in Kyiv cost in early 2021

Victoria Bereshchak
Real estate market columnist

The past year has truly justified the title of one of the most unpredictable and turning points in modern history.

The transformations that affected all spheres of public life, without exception, also affected the real estate market: the buyers have changed their requirements for apartments geography, and for the spatial planning of public places, and for the improvement of courtyards, and especially for safety.

And real estate developers have learned to live in conditions of tending to zero demand, have caught the trick of accumulating deferred investors’ interest that can someday be converted into real deals, and have been struggling with multiple market eczemas throughout 2020.

Among them, undoubtedly, the failed reform of the State Architectural and Construction Inspection, better known under the abbreviation SACI, the economic terrorism of pseudo-activists, and chaos because of the Kyiv development master plan absence will be remembered.

The real estate market hopes to spend 2021 in a slightly more familiar way. In January, because of the lockdown, demand will drop significantly, but if the restrictions are lifted by the spring, we will traditionally witness a feverish surge in activity. Both new projects and increased attention of investors will cheer up the housing market.

At the same time, the situation with SACI began to adjust by the end of the year. It is worth paying more attention: several large developers have already received long-awaited certificates, have applied for a new batch of houses. The process has begun, and this is encouraging.

However, the lack of a General Plan, mechanisms for resolving long-delayed construction and problematic facilities, protecting the investors’ rights, as well as an understanding of how the state plans to launch affordable mortgages that has not yet taken shape, still promises many threats to the real estate market.

By January 2021, the average price per square meter in new buildings in the capital increased by 2.2%, or 600 UAH — up to UAH 27,700 per sq. m in hryvnias and by 3.2%, or $30 — up to $980 per sq. m in dollars.

It is curious that for the year the month-on-month growth amounted to 4,000 UAH, or 16.9% in hryvnias, and in dollars, on the contrary, we see a decrease in relation to the indicators of December 2019 by $20, or 2%. Here, however, it is important not to lose sight of the dollar value that has changed significantly.

Taking into account the rise in the construction cost due to the rise in building materials’ prices—both domestic and imported, as well as the steadily growing price for construction and installation work, housing prices in Kyiv are expected to grow moderately. And this growth will only be limited by consumer activity in one or another segment.

The weighted average prices for real estate in Kyiv, taking into account the lockdown factor by the spring, are likely to rise insignificantly—about 3%, while the currently popular formats in the comfort+ classes and the business segment, taking into account the active construction pace and the keeping the real buyers’ interest, even if it is largely deferred, the price will rise much more actively.

In comfort + and business class, an average price increase of 5-7% can be expected during winter.

Much will also depend on the developers’ stable pace, their resilience in a crisis and the ability to correctly determine the focus of their attention.

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