Tendencies in Ukrainian real estate market

Prices landslide on purchase and sale market

According to Global House Price Index rating published by one of the major conslulting companies Knight Frank the prices for real estate fell in Ukraine by 26%. Real estate experts believe that one of the main grounds provoked the prices landslip in realty market is the political crisis taking place in Ukraine.

New buildings erection is frozen
Political crises as well can entail the freeze of construction in 30% of building sites if Kiev. By the end of February 90% of construction works in Kiev were suspended. Developers hoped that the works would be renewed in the middle of March but according to real estate market operators 30% of the construction projects can be frozen for an uncertain term. At that brokers have noticed the drift of demand from the projects on the initial construction stage to the completed buildings and to the secondary housing.

Prices slump in premium class realty market
The unstable situation resulted in the situation when the quantity of people wishing to sell the real estate exceeds the quantity of potential buyers. Thus many owners of premium real estate sell out their property with 40% discount.

 

Британский квартал в центре Киева
Posh 'British' residential area in Kiev

 

 

As for demand for the time being Kievers show interest in pre-revolutionary mansions of historical value located in the centre of Kiev. Pre-revolutionary and contemporary buildings are demanded now share to share alike. Even in the conditions of extremely low demand there are potential clients taking deposits in banks. In order not to keep in hand they refer to invest their capital in real estate. According to the experts the quantity of buy and sale bargains rose for the last month by 5-7%. The landlords have already comprehended that there would be no positive changes and it is more advantageous to sell realty now.

Departmental realty sell-out
Governmental countryside mansions and other departmental realty replenish Ukrainian budget with dozens of billiards of hryvnias. Ex-president of Ukraine used to obtain 14 official residences. Amidst them there were such architectural masterpieces as House with Chimaeras, House of Crying Widow, Kovalevsky’s Mansion and several countryside mansions in Kiev region, Ivano-Frankovsk area, Transcarpathia and 8 governmental dachas in Crimea. According to official sources the houses which have historical value won’t be sold out. The budget will be replenished by the means which will be received after governmental dachas sell out at the auctions.

Ведомственный особняк в Киеве - дом химерами
Famous House with Chimaeras won’t be sold on the auction

 

Russions run away from Ukraine
Russians obtaining real estate in Ukraine sell out Ukrainian realty or validate the ownerships under power of attorney to trustees. According to SV Development experts Russians obtain much realty in Ukraine as Moscow realty is much more expensive than for instance in Kiev. Certainly Russians do not sell out their property by give-away prices but actually potential buyers can count on considerable discounts.

Realty market of Kiev

Rental market of Kiev as well displays the rise of supply and demand dampening down. Experts claimed that in whole rental prices fell by 10-15%. For instance after crises small size flats in Kiev fell in price from 3.000-3.500 hryvnia of pre-crisis time to 2.000 hryvnia per month. During the period from December, 2013 till March, 2014 the supply amount rose by 20%. At that the demand on the rental market has decreased with the shortcut of workspaces.

What will happen with Crimea real estate?

Prices for realty increased in Crimea by 20%. Three weeks ago one-room flat in Yalta cost 32.000 US dollars. Today the same apartment costs 57.000-65.000 US dollars. People in Crimea conceived already that there will be no war in the peninsula, they know with whom there will be tomorrow of Crimea.
 
Недвижимость в Крыму подорожала на 20%
Realty in Crimea grew in price by 20%
 
Experts knew that prices grow because of tax price rise. Sellers in Ukrainian territory should pay 8% tax from the price of the objects for sale while in Russia the taxation for property registration makes up 20% of the property value. As well price rise was provoked by the new privilege attracting more and more Russians: the buyer of realty in Crimea automatically becomes a citizen both of Russia and Ukraine

Russians prefer to acquire realty in the south of Crimea, closer to the sea. As for Kievers they prefer to buy residential property without preliminary viewings striking the deals not in Crimea but in the capital.

At the same time the lawyers warn that because of absence of access to the ownership state register the chances to be entrapped by tricksters are much higher, especially in mortgage segment. 
Resort realty rental tendencies
As the result of political crises 80% of resort realty is not booked for the holiday season. According to non-governmental organization of realtors in Crimea last year there were booked in 90% of rooms and apartments in resort areas of the peninsula while this year only 30%.

Despite these distressing tendencies the owners even raised the rates trying to link the prices to US dollars exchange rate, Thus they are deprived of the very few potential clients.
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