UTG company experts analyzed the dynamics of buying and selling residential real estate: apartments, houses and cottages in Ukraine. Due to military actions, according to the Ministry of Justice in Ukraine, in 2022, the number of transactions on the housing market decreased to 99,633 contracts, and the drop was almost 70%. In 2023, the situation began to recover, and the number of deals increased. But at the same time, there is a significant change in the structure of sales. So, if before the war the share of investment or speculative purchases was 40-50%, then in 2022-2023, almost all deals – 85-90% were related to improving one\u2019s own housing needs, as well as those arising from forced displacement. At the same time, the remaining unimplemented agreements – about 200,000 contracts, according to analysts\u2019 expectations, will be transformed into deferred demand and will be implemented within 4-5 years after the end of the war.<\/p>\n
According to the data of the Ministry of Justice in Ukraine, at the end of 2021, state and private notaries concluded 325,174 contracts for the sale of apartments and individual houses. This was the highest figure since 2007, when 348,772 contracts were concluded. At the same time, in the dynamics of 2009-2021, an average of 28,406 deals per year are concluded in Kyiv, and about 16,419 deals per year in the Kyiv region.<\/p>\n
Such indicators of investments in real estate arose against the background of several factors. First, the devaluation of the national currency, inflation, the population\u2019s skepticism towards the banking system and the lack of available investment opportunities for broad segments of the population have turned real estate investment into a financial instrument for saving savings or an alternative to multiplying savings. Secondly, the traditionally low supply of housing (about 22.1 sq.m per person) contributes to the desire of Ukrainians to increase the comfort of living when financial opportunities arise. Thirdly, the growth of the population of the Kyiv region has a favorable effect on the increase in demand. Therefore, according to analysts\u2019 expectations, in the coming years there will be a revitalization of the residential real estate market with the conclusion of purchase and sale agreements both of an investment nature and for personal needs.<\/p>\n
The increase in the number of concluded mortgage contracts in Ukraine can contribute to the revitalization of the market. However, this tool is not working at its full potential yet. Thus, according to the data of the Ministry of Justice, in 2023, the most mortgage lending contracts were concluded in Kyiv – 7,214 contracts. The underdevelopment of the mortgage lending market is facilitated by a shortage of solvent borrowers, a low level of creditor rights protection, and strict lending conditions. An important obstacle to development is also the lack of acceptable opportunities for real buyers to use financial “leverage”. It is known that the share of real estate that is purchased with the involvement of bank lending does not exceed 4.5%. Even so far, the state preferential mortgage “eOselya”, which provides housing from 3% per annum for up to 20 years, does not have the proper effect. Despite the fact that this program tries to revive the market, stabilize sentiments, encourage potential buyers to take more active actions, and show cooperation programs between banks and developers, the actual number of loans issued relative to the total number of sales remains insignificant. At the same time, the main factor for the more effective operation of the program, experts say, is the demand for long-term rescheduling from developers.<\/p>\n
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