By the end of 2021, the demand for apartments in new residential complexes in the largest Ukrainian cities will decrease by more than 30%.
According to the real estate specialists (realtors) of Ukraine, the number of transactions in the country’s primary market has already significantly decreased (by the end of November in comparison with August):
- in Kyiv—by 35%;
- in Dnipro—by 30%;
- in Odesa, Kharkiv, and Lviv—by 25—27%.
According to the experts, the decrease in the activity of buyers in the primary housing market was primarily caused by the too fast growth rates of the cost per square meter that became incomparable with effective demand.
"From 2020 and throughout 2021, the cost of housing in new buildings in the largest cities of Ukraine has штскуфыув by an average of 35—40%. At the same time, the number of transactions in two years has increased by an average of 25—30%. However, too fast processes in the market have led to the actual "exhaustion" of the effective demand," Yuriy Pita, the President of the Association of Real Estate Specialists (ARESU), notes.
According to the expert, the reasons for the rapid growth in the cost of housing in 2021 include the reduction in construction volumes, the lack of alternatives to the primary market to preserve the citizens’ wealth, and the lifting of pandemic restrictions that had a positive effect on the country's economy as a whole.
"From 2020 and for the three quarters of 2021, demand exceeded supply by 10-15%, and that allowed developers to increase prices. However, since September 2021, a gradual decline in the buyer activity began. Now the supply is already 20% higher than the demand, and that has become the main factor in price stabilization," Yuriy Pita stresses.
The expert predicts that until the end of 2021, the situation in the primary market in Kyiv, Dnipro, Lviv, Odesa, and Kharkiv will not change dramatically, and respectively, the cost of the square meter will be stable.
"Until the end of the year, the average cost per square meter in the primary housing market in the largest cities will remain constant. However, such price stability will be nominal. Real buyers will be able to purchase apartments using promotional offers and discounts from the developers. At the same time, such incentive offers are unlikely to be effective and will not result in a sharp increase in the number of buyers," the Head of the ARESU says.
According to the ARESU, by the end of the year, 80% of the residential complexes under construction will have discount systems ranging from 5% to 15% in the largest regional centers of Ukraine.