Forecast for 2022: What housing in Ukraine will rise in price the most

Author

Lesia Solovchuk

In the first half of 2022, apartment prices, both in the primary and secondary markets in Kyiv, Dnipro, Lviv, Odesa, and Kharkiv, may increase by 5-7%.

Such an increase is predicted by experts of the Association of Real Estate Specialists (Realtors) of Ukraine (ARESU) subject to a controlled pandemic situation and relative economic stability in the country.

Primary housing is the locomotive of the market and prices

A slight increase in prices—within 5%—is possible on the market of new buildings during this period only in 15% of residential complexes, predominantly of a comfort class.

According to the forecast of the Association of Real Estate Specialists (Realtors) of Ukraine, the increase in the cost of a square meter will relate primarily to the transition to a new stage of construction and a corresponding reduction in risks for potential investors.

In the first months of the year, there will be a price lull on the market in the largest Ukrainian cities. The period from January to March in new residential complexes will be marked by price stability related to a drop in demand that has been glasting since the second half of September 2021.

The price recovery should be expected during the active season—from April to June. During this period, the cost of a square meter in Kyiv, Lviv, and Odesa may increase by an average of 7%, while in Kharkiv and Dnipro it will be about 5%, Yurii Pita, ARESU President, comments to .

More than 70% of demand during this period will be concentrated on properties of the comfort and comfort+ classes (new housing formats) that will affect the developers’ pricing policy of developers.

"However, one should not expect sharp price hikes. The developers will implement more flexible pricing tactics relying solely on the existing demand and the level of costs for building houses," the expert notes.

According to Pita, the largest price increase is expected during the construction phase up to 1 year in the most demanded segments, mainly comfort class residential complexes, new facilities (comfort +), and business categories. At the same time, the cost of economy-class housing in 90% of the facilities under construction will remain unchanged: the price growth will not exceed 3%.

"In 2022, the process of the demand reorientation for higher quality properties that, by their characteristics, can satisfy the most discerning buyer, will continue. Accordingly, this will impact the price formation," he stresses.

Small-sized Soviet apartments: Prices level off

In the first half of the year, the price situation on the secondary housing market will develop according to the demand conjuncture. However, according to Yurii Pita, the average price rise in Kyiv, Dnipro, Lviv, Odesa, and Kharkiv is possible only within 5% for the most demanded apartments with an area of 35-50 sq. m.

"As of the beginning of December, the demand for housing in the largest cities of Ukraine is 65% concentrated in the segment of small-sized apartments, predominantly of Soviet construction. It is in this segment that a slight price rise is possible in the first half of the year," the expert says.

Given the extension of the quarantine restrictions, there will be price stability in the largest cities in the first three months. Therefore, by April 2022, fluctuations in the cost per square meter on the secondary market in Kyiv, Dnipro, Lviv, Odesa, and Kharkiv will not exceed 1%.

Subsequent changes in the cost of apartments may relate to an increase in demand. If the number of potential buyers increases by at least 10%, prices in the secondary market may increase within 5%," Pita emphasizes.