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In the case of a lockdown, rental prices in Ukraine will fall again by 30-40%

For a year and a half, the payment has not yet reached the pre-pandemic level. Photo: waytostay.com

For a year and a half, the payment has not yet reached the pre-pandemic level. Photo: waytostay.com

The announcement of severe restrictive measures in the country may lead to a decrease in rental prices for apartments by 30-40%. Yuriy Pita, President of the Association of Real Estate Specialists (Realtors) of Ukraine, stated this.

The price situation in various categories of housing will depend primarily on the duration of the strict quarantine. And as the previous quarantine showed, the rental segment is sensitive not only to socio-economic, but also to "pandemic" changes.

"It is obvious that in the lockdown conditions, demand will fall sharply and will affect rental prices. However, both in the primary and secondary markets, once the restrictions are over, prices will slowly level out to September levels," Pita noted.

According to ARES, in September in the segment of rental housing in the largest cities of Ukraine, demand was realized by more than 90%, respectively, the price for the next 2-3 months was almost completely formed.

At the end of September, the average rise in rental prices is 5-10%, depending on the city, location, technical condition of the house, and the quality of interior.

The largest growth—up to 10%—was recorded in Kyiv, Lviv, Kharkiv, Odesa, and Dnipro. In other regional centers, the increase in rental prices did not exceed 5%.

If there is no lockdown, rental prices will not increase significantly until the end of the year. "Small-sized housing of the Soviet development is in demand among 60-65% of tenants and can grow in price by no more than 2-3%, and mainly due to the appearance of the new objects on the market—apartments that are prematurely vacated by tenants," the specialist noted.

The price bracket for one-room apartments in Kyiv, depending on the area and location, can range from 4,500 to 6,000 UAH in the secondary market—these are the options that are most in demand. In new buildings, rent will take from 8,000 to 12,000 UAH.

A two-room apartment can now be rented for 8,000-9,000 UAH in the Soviet-type houses, and for 15,000-18,000 UAH in the new buildings.

According to the association, prices in the regions may differ from those in the capital by 40-50%.

Another factor that, according to the expert, can affect pricing is the increase in utility tariffs, in particular, the increase in the cost of heating.

"There is a certain price line, above which rental prices cannot rise. Rent expenses should not exceed 30% of the monthly rent of an apartment. However, at the height of the heating season in old Soviet houses, tenants’ utility costs will reach 40-50% of the rental price, and that can lead to an outflow of tenants and a decrease in rental prices by 10-15%," he stressed.

According to Yuriy Pita, the rise in rental prices still remains moderate: for a year and a half, the rent has not yet reached the pre-pandemic level.

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