Dwelling services in Kyiv almost halved during wartime. This is more than in crisis years of 2014-2015

Author

Lesia Solovchuk

Over the full-scale invasion and the mass relocation of Kyiv residents to other regions of Ukraine and abroad, dwelling services in Kyiv have collapsed by almost half — much more than in the crisis years of 2014-2015.

During the five months from January to May 2022, the average rental price in Kyiv fell by 41%, while in 2014 prices fell by 26%, and by 38% over the entire two-year crisis period, according to data from Address.ua.

According to the portal Address.ua, the median price for renting residential real estate in Kyiv in May 2022 was $6/sq.m. Compared to February, the price has decreased by 45% per sq. m. in US dollars. The price of renting a square meter of one-room apartments was $7.

Dwelling services in Kyiv in May 2022: Prices by district

Only since the end of April, the demand for apartment rental has resumed in Kyiv, and this is not due to the return of tenants to the capital, but to a greater extent, due to internally displaced persons who left the combat zone.

In February 2022, the median rental price in dollar equivalent was $11 per sq.m., but with the outbreak of the war, prices began to fall sharply. For instance, in March 2022, the median price per square meter was $9 per square, in April — $7, and in May — $6. In general, compared with the pre-war period, the median rental price in the capital fell by 45.4%.

Due to the rise in the dollar by 30% — from 28 UAH to 35.8 UAH, prices in hryvnia equivalent fell by at least 13%.

For instance, the median price of apartment rental in Kyiv in May 2022 was $6/sq.m. The price of renting a square meter of one-room apartments was $7. The median price of a two-room apartment was $6/sq.m., and three-room apartments — $5/sq.m.

Traditionally, both before the war and now, the most expensive area in Kyiv to rent housing is Pechersk, where the median price of renting a one-room apartment is $654. In Shevchenkivskyi and Holosiivskyi Districts, one can rent a one-room apartment in the range of $430-470.

The cheapest district to rent housing is Desnianskyi District, where one can rent a one-room apartment for $300 per month. Holosiivskyi District ranks third — $325 per property ($7/sq.m). The minimum median price for renting an apartment recorded in Desnianskyi District — $219 per apartment, or $5 per sq.m.

The average rental price in the center of the capital is $468 per property or $8 per sq.m.

Supply and demand: Migrants from east save dwelling services

Starting from the end of April, demand for apartment rental started to recover in Kyiv, but not at the expense of tenants who returned to Kyiv, but to a greater extent at the expense of internally displaced persons who left the combat zone. The criteria for searching apartments for rent have not changed much: tenants are primarily interested in the cost of housing.

Currently, supply significantly exceeds demand, so landlords reduce prices as much as possible or do not take a holding deposit, and some owners of rented housing even ask their tenants to pay only for utilities.

In terms of the price situation, business and premium class housing suffered the most. For instance, the average rental rate of Pecherskyi District real estate decreased by 57%. The situation is somewhat better in the most budget-friendly segments.

The criteria for searching apartments for rent have not changed much: tenants are primarily interested in the cost of housing.

Demand from the migrants is focused on the most affordable apartments, as a result of which prices in Desnianskyi and Sviatoshynskyi Districts fell "just" by 33% and 38%, respectively.

Forecasts: Difficult months await market

According to Roman Gerasimchuk, CEO at City Development Solutions, despite the partial resumption of activities in the rental market, no improvement is expected in the coming months.

"A small amount of demand will be generated by IDPs and people returning to Kyiv, but this will not be enough for a full-fledged revival of the market. Not earlier than September of this year, subject to positive changes at the front and the absence of new threats to the Kyiv region, it will be possible to assess the real situation in the rental housing market and determine trends that will shape the dynamics of market revivall," the expert stressed.

According to him, the market is being pressured by the dollar in exchange offices, inflation, and the loss of jobs and sources of income by a significant part of the population. This puts additional pressure on the residential real estate rental market and makes it difficult to start a full market recovery, as well as creates a risk of further price reduction.