Cost of new housing in Ukraine may grow by 10% - realtors

The cost of housing in the primary market in Ukraine may grow by 5-10% and in the secondary market by up to 7% by the end of 2021, President of the Ukrainian Realtors Association Yuriy Pita, has told Ukrinform.

"The growth in prices will be more inertial and mainly as a result of the activity of buyers who will buy housing purely for investment purposes. However, according to the association, the resource of potential buyers is now almost exhausted. In Ukraine, only 7-8% of citizens can afford to buy a home with cash, under mortgage or installment programs. Such a limited number of potential buyers is the main factor restraining price increases," the expert said.

According to Pita, the cost of new apartments in the largest cities of Ukraine - Kyiv, Dnipro, Lviv, Odesa, and Kharkiv - has risen by 18-20% since the beginning of the year. In other regional centers, such as Vinnytsia, Ivano-Frankivsk, Rivne and others, the price on the primary real estate market increased to 15%.

"By the end of the year, it is expected that prices for housing in the primary market can grow from 5% to 10% depending on the region, construction site, recreational and infrastructural opportunities for future residents," he said.

However, similar price trends can be observed in the secondary market as the cost of used apartments in the largest cities can grow by 17-20% by the end of the year. This mainly applies to the most popular category of housing - small apartments in proper condition, with an area of up to 50 square meters, in typical Soviet buildings. However, in other regional centers, the growth of prices for similar apartments is unlikely to exceed 15%.

The main reasons behind the rising cost of housing in the secondary market are inflation, uncertainty in the country's economic policy, which affects the welfare of citizens, as well as the limited effect of government mortgage programs, Pita said.

According to him, in the rental housing market, if there are no new force majeure situations or new lockdowns, prices will almost completely return to the "pandemic" level. Thus, the cost of rent in 2021 will grow by 25-30%.

"In autumn, the rent of apartments, mainly one- and two-room apartments in Kyiv, Dnipro, Lviv, Odesa, and Kharkiv can increase by 10-15%, whereas in other regional centers it can increase by up to 7-10%. At the same time, the promised increase in utility costs by 40-70%, which will fall on the shoulders of tenants, will be a safeguard for future price increases despite the possible increase in demand. By the end of the heating season, the cost of rent will be focused on the total costs of tenants," Pita said.

According to the Ukrainian Realtors Association, in the first five months of 2021, the cost of housing on the secondary market in Ukraine grew by 3-7% and on the primary market by 10-15%.

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