By the end of the year housing prices in Ukraine may drop by 10%
By the end of the year, housing prices in Ukraine will decrease by no more than 10% compared to December 2021, the Ukrainian Trade Guild (UTG) Press Service told to Interfax-Ukraine. As UTG analysts pointed out, the market is currently affected by two opposing trends. “The decrease in the population of a number of large cities, the income level drop and solvent demand, the active stage of hostilities in a number of Ukraine regions are adjusting the cost of housing downwards. However, simultaneously with the decrease in demand, the offer decreased due to a significant slowdown in development activity and the pace of housing construction. This partially equalizes price changes on the secondary market” said Kostyantyn Oliynyk, head of the UTG Strategic Consulting Department.
Experts also noted an increase in demand for new housing due to the destruction of part of the country’s housing stock in a number of regions. Objective factors – the increase in the cost of construction and assembly works and building materials – provoke an increase in the value of primary real estate. According to UTG’s analysis, the impact on the market of the first group of factors is much stronger, and therefore a gradual decrease in the cost per square meter is expected in the near future, at least until the end of hostilities. However, given the decrease in new supply and the increase in demand, the cost reduction will not be significant in most regions.
“In general, the overall decrease in the cost of housing on the market will be no more than 10% compared to December 2021” Oliynyk noticed.
Regarding the number of transactions, according to UTG estimates, in the first half of the year, the number of transactions for the purchase and sale of housing decreased by 25-35% compared to the same period in 2021. “The situation can change for the better if the government adopts special social programs aimed at supporting citizens who have lost their homes, as well as providing square meters for residents of temporarily occupied territories” Oliynyk indicates. The UTG company was established in 2001. It developed more than 1,300 concepts of real estate objects. During the years of work, 4.7 million square meters of commercial space were leased with the participation of the company in Ukraine.