In July 2022, construction works resumed in most of the Ukrainian regions. Meanwhile, despite the sales rates on the market being very low, the average prices per square meter for newly built apartments are higher now as compared to February.
Construction companies give two reasons to explain the high prices. First, the cost of construction is on the rise; second, the start of new stages of construction has been postponed. However, developers are willing to offer special payment terms for resolute investors, as analysts from the LUN company say.
Construction recommenced: the "safe" regions are topping the list
According to the LUN Misto online map project, construction works are being resumed, but not evenly across different regions.
The rate can reach up to 90% in Western regions and over 60% in the Odesa region, while in the capital, 40% of developers have reported that their workers are back on the construction sites
Marketing Director Denys Sudilkovskyi said in a commentary to that sales are now markedly lower than before the war. As developers say, a backlog of demand is now building up. Investors are taking stock of new buildings but aren’t willing to invest as actively as before the war due to the unforeseeable future.
"To some extent, our data confirm this. As we see from the dynamics of visits to the LUN website, the interest in investment in construction in Western regions is averaging 60%, which is higher than the pre-war level. At the same time, the regions close to the battlefield are only beginning their restoration, and their visit rate is 20-30% of that in February," the expert explained.
As he said, those developers who have returned to work and sales understand that the interest of customers doesn’t mean they’re willing to buy, and so they try to invoke demand by offering special propositions, such as long-term installment plans for ready-built or nearly ready-built apartments.
Kyiv, Lviv, Odesa: prices for newly built apartments across regions
An expert in real estate Iaroslav Tsukanov explained in a commentary to that the prices for newly built properties are rather arbitrary today. They are often excessively raised in order to have an opportunity to offer a discount.
"Nobody understands today how much a square meter can cost. On the one hand, the prices for construction materials have increased, and it seems that construction isn’t economically expedient now. It’s virtually impossible to sell apartments for a price that covers the cost of construction. On the other hand, it’s not feasible to raise the prices to the break-even point, as the consumers have no income," said the expert.
He told that today, only key market trends can be outlined in broad strokes using numbers.
According to LUN, the average price per sq. meter in Kyiv for a newly built apartment was $1310 in June, which is $40 higher than in February. In the Kyiv region, the average price was lower than in February: a new apartment is $800 per sq. meter.
The smallest newly built one-room apartment in Kyiv will cost an average of UAH 1.7 mln. The price for the smallest two-room apartment will average at UAH 2.5 mln before applying any personal discounts.
In the Lviv region, the average dollar prices show a 10% increase compared to the propositions of sales departments in February. The smallest newly built one-room apartment in Lviv itself will cost an average of UAH 1.6 mln. For the smallest two-room apartment, a sales department will ask an average of UAH 2.4 mln before applying discounts.
The Odesa region, after a minor sag in previous months, has returned to the February prices, and across different classes of housing complexes, the prices for the most affordable options have even increased. The smallest one-room apartment in Odesa will cost an average of UAH 1.1 mln. The price for the smallest two-room apartment will average at UAH 1.7 mln before applying any personal discounts.
The analysis also shows an increase in prices in the regions that have accepted significant numbers of internally displaced people. Thus, in the Zakarpatska region, the prices per sq. meter of new apartments have increased from $750 to $960 within a year. The Ivano-Frankivska region also shows an increase in all classes of new buildings during a year.