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Building boom: Apartments in 1,700 new buildings are being sold in Ukraine at the same time

In Ukraine currently, the primary market is selling housing at the same time in 1,700 new residential complexes. Most of the new buildings were built in Kyiv, Kyiv region, and Lviv. Andriy Mima, co-founder of the portal LUN, stated this today at the conference Building&Constructions Forum 3.0.

"Dnipro has already commissioned 20 residential complexes this year, last years it was 10. Kharkiv is also showing growth. In total, 210 residential complexes were commissioned in the country in 2019. In 2020—330. In 2021—400 new commissioned complexes for sale. In general, as of today, housing in 1,700 complexes is being sold in Ukraine," Mima notes.

According to LUN, most of these residential complexes have been built in three regions. There are 226 new residential complexes in Kyiv, there are even more in the Kyiv region, in Lviv—230, in Odessa—188 new buildings. Another 800 residential complexes have been built in other cities of the country.

According to him, indicative for the active construction market is the dynamics of prices for new buildings. "Over the past seven years, the picture is as follows: in hryvnia for 1 square meter the price in Kyiv was 24,000-25 ,000. In 2020, the price increased by 15%, mainly due to the dollar depreciation. In 8 months of 2021, the cost increased by 16%. If we estimate in currency, in 2020 the price in dollars remained the same—about $900, and in 8 months it increased by 22% from $950 to $1,200. The latest data for October is $1,250 per meter," Mima points out.

If we divide prices according to housing class, a square meter in an economy class apartment costs from $800, comfort class—from $1,000 or more, business class—$1,800, premium—$2,800. The clusters’ price growth for 2021 was uneven: the economy class grew less, while the business and comfort class increased by 25% in 9 months of this year.

According to Mima, despite the pandemic, there is a high demand on the Ukrainian market for purchasing apartments in new buildings. "People buy both at the start of construction and at the stage of the excavation, and are ready to wait three years before the work is completed," he says.

According to Serhiy Pylypenko, General Director of the Kovalska Industrial and Construction Group, over the past two years the construction market has been operating as a "seller's market". He says that after the stressful lockdown, the factor of deferred demand affected the market, and that gave an incentive to developers to actively build new facilities. Amid active demand, developers began to increase the price per square meter.

However, as he stresses, the situation can change dramatically due to the rapid growth in the cost of building materials—for metal, sections, wood, glass, cement, and crushed stone—this will further increase the cost of construction and the cost of housing in the coming years. "A situation where housing prices will rise and there will be no mortgage lending will lead to a slowdown in construction. To prevent this from happening, we need to think about incentives to compensate for the future slowdown," Pilipenko stresses.

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