Standby: What land prices will be in 2022

Author

Lesia Solovchuk

The market of building plots and private houses in the suburbs of Kyiv, Dnipro, Lviv, Odesa, and Kharkiv in the next six months goes into standby in the next six months—without excessive activity and price hikes.

In the first half of 2022, the experts predict a minimum rise in prices related to a subsidence in demand in this segment. The increase in value is possible only for the most demanded properties in good locations, Yuriy Pita, the President of the Association of Real Estate Specialists of Ukraine (ARESU), notes.

This refers, in particular, to the land plots with an area of 8-10 hundred square metres with service lines (more than 60% of demand) and private houses with an area of up to 150 sq. m (more than 70% of demand) at a distance of 10-15 km from the major Ukrainian cities.

According to the ARESU, the increase in prices even in these categories can reach a maximum of 3—5%.

The expert associates the price stabilization with the fact that the effective demand in the segments of land plots and private estates has almost dried up.

"The price changes will largely depend on the property specifics and the existing offer. But in the first half of the year, even the most demanded land plots and private houses are unlikely to grow in price by more than 5%," Yuriy Pita stresses.

In his opinion, the overall situation in the first six months will be quite predictable—after all, the real estate market is not threatened by a frenzied price rise, or any crisis phenomena that could "collapse" it.

"One should not expect any rapid price changes because there are no prerequisites for this now. At the same time, much will depend on the development of mortgage lending, the effectiveness of legislation regulating housing construction, the growth of effective demand, and the epidemic situation in the country," the expert explains.

Prices in Kyiv keep the balance

Similar forecasts apply to the suburbs of the metropolitan area: the interest in land and activity on the market will develop not earlier than April-May 2022, when demand usually grows by 10% in comparison with January.

According to the ARESU forecasts, more than 70% of the demand will fall on plots with an area of up to 10 hundred square metres with service lines in the picturesque places and at a distance of no more than 20 km from Kyiv. From April to June, the cost of such building land may increase by an average of 5%.

"The cost of land plots "imperfect" for buyers that are inferior to the most demanded plots by their characteristics will remain almost unchanged," Olena Gaidamakha, the head of the ARESU Kyiv city branch, said.

There will be a similar situation in the purchase and sale of private houses. According to the expert, two-thirds of the demand will fall on houses with an area of up to 150 sq. m in good locations at a minimum distance from the capital. In the first half of 2022, the cost of private estates may increase in value by no more than 3—5%.

"In the coming months, the situation in the segment of private estates will be quite acceptable for both the potential buyers and the sellers. Because in 2021, the cost of houses increased by an average of 20%, and this is a very significant growth, partly inconsistent with the market opportunities of the potential buyers," Olena Gaidamakha summarizes.

Therefore, in her opinion, one should not expect any rapid growth in value in this segment of the real estate.