Housing prices, both in the primary real estate market and in the secondary real estate market, have been growing non-stop throughout 2021. Neither the coronavirus pandemic nor the economic crisis have hindered this. UNIAN figured out whether this trend will continue in 2022 and how to correctly approach the purchase of an apartment.
The rise in prices does not stop on the real estate market. It started back in 2020, and neither the coronavirus crisis, nor the pessimistic forecasts of experts associated with it, could prevent the meteoric rise. A year ago, the cost per square meter increased by an average of 10-15%.
The process of housing price hikes did not stop in 2021 either. While traditional seasonal fluctuations have not been avoided, there have been reform innovations.
“2021 was like a roller coaster, it became another test of strength for the construction market. The first half of the year was feverish in the commodity and energy markets, which hit the cost of construction. It grew by 30-40%, depending on the segment and class. and affected the rise in price per square meter “, – said the founder and managing partner of the” DIM “group of companies Alexander Nasikovsky.
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According to him, in the wake of the upward dynamics of prices in new buildings and the peak of rates on deposits, the amount of investment demand also grew rapidly, having added up to 20% since the beginning of the year. But in September-October this figure was won back and the rates of investment activity slowed down.
“I must say right away that this is the normal cyclical nature of the market. Another important event happened in the fall – the liquidation of the notorious SACI (State Architectural and Construction Inspection) and the promotion of urban planning reform. There is hope that, finally, the process of issuing permits and obtaining certificates got off the ground and developers can concentrate on their immediate task – the creation of high-quality modern housing projects “, – stressed Nasikovsky.
The director of the construction company Budova (Odessa) Mykola Kutsak believes that, in addition to the growth in the cost of building materials, higher wages and fluctuations in the exchange rate of the hryvnia, the distrust of Ukrainians in the country’s banking system also plays a huge role. In this regard, the purchase of a home is still seen as a preservation of funds and a profitable investment. Many buyers have come to think like investors, preferring to buy apartments where they can be easily rented out or resold and earn extra money. And demand pushes prices up.
“At the beginning of 2020, when the pandemic had just begun to sweep across the planet, many predicted a permanent decline in Ukrainians’ interest in acquiring real estate. and prices are only growing. If at the end of 2020 the cost per square meter in a comfort-class residential complex in Odessa started at $ 750, now it reaches $ 1,000 and more. Budova, among other things, reacted to the market situation by increasing the cost per square meter, ” – noted Kutsak.
The most expensive new buildings – in Kiev / photo from UNIAN, Viktor Kushchenko
In which segment of the real estate market the prices per square meter are growing fastest?
Primary real estate market
The primary company continued to occupy the leading position in 2021 in the real estate market both in terms of demand and price. The most expensive new buildings are in Kiev. Here the average price of a one-room apartment in this segment has reached 43-44 thousand dollars, a two-room apartment – over 60 thousand dollars, a three-room apartment – more than 80 thousand dollars. And this is not a premium or business class, but the most “affordable”, unpretentious housing. The regional centers have also pulled up to the prices in the capital. In the Dnieper, a one-room apartment will cost, on average, over 30 thousand dollars, a kopeck piece and a three-ruble note – almost 40 thousand dollars and about 50 thousand dollars, in Odessa – 30, 38, 45 thousand dollars, in Kharkov – 26, 37, 42 thousand dollars, in Lviv – 32, 45, 52 thousand dollars, respectively.
In the primary real estate market for the year, the median price increased by more than 20%. In autumn, there was a certain stagnation – due to the strengthening of the national currency and the abundance of all kinds of “bonus” shares, but this is a temporary trend, analysts of the Address.ua portal note: “The main driver of the dynamics of the primary real estate market was investment demand – its continuation in the future depends on many factors, including the situation on the foreign exchange market and maintaining at least the appearance of stable development of the primary real estate sector. “
Secondary real estate market
In the secondary real estate market for the year, the median price increased by more than 15%. The most in demand are small-sized apartments in good condition with an area of up to 50 square meters in typical Soviet-style houses located in good locations.
Three- and four-room apartments are slightly inferior in the price corridor, which is mainly due to the rise in prices for utility tariffs.
“Growth in demand, purchasing power and prices in the primary market have become the main factors behind the rise in prices in the secondary real estate market. At the same time, summing up the year, we can say that the price level in the market is becoming uncomfortable for the buyer. Selling apartments in the secondary market is becoming more difficult. and the actual sale price may be 10% less than the declared one, “analysts of the Address.ua portal note.
In the last months of 2021, demand shifted in favor of finished housing / photo from UNIAN
According to their review, in the last months of 2021, the demand between the primary and secondary real estate markets has shifted in favor of finished housing. This is due to two factors. The sharp rise in prices at the “primary market” frightened off some buyers. Since housing in the secondary market in 2021 rose in price much more slowly, its competitiveness has noticeably increased. The second factor is the development of the mortgage market – 88% of loans are issued specifically for secondary housing.
Forecast for 2022
It is difficult to predict the situation on the real estate market in 2022, taking into account the ongoing pandemic and the protracted exit of the global economy from the coronavirus crisis. Nevertheless, according to the analysts of the Address.ua portal, most likely, at the beginning of the year, the stability of the primary market will be observed. But further prices will rise.
“There are no prerequisites for their reduction. The main factors that will affect the price dynamics will be: the hryvnia exchange rate, inflation and growth in construction costs, as well as demand and purchasing power of the population,” analysts say.
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As for the secondary housing, according to their estimates, at the beginning of 2022 prices in this segment will also stabilize, but in the future their gradual increase is possible.
In general, the main factors that will influence the real estate market are the economic and political situation in Ukraine.
According to the forecast of the Association of Real Estate Specialists (Realtors) of Ukraine, in the first half of 2022, while maintaining a controlled pandemic situation and relative economic stability, the price growth in the primary and secondary housing markets will not exceed 5-7%. This will be due to a decrease in demand. A slight rise in price should be expected with the onset of the active season.
“In 2022, the process of reorientation of demand for higher quality properties will continue, which, according to their characteristics, can satisfy the most demanding buyer. Accordingly, this will affect the formation of prices,” says Yuriy Pita, President of the Association of Real Estate Specialists (Realtors) of Ukraine.
In his opinion, the price situation in the secondary housing market will develop in accordance with the demand conjuncture. However, the average price increase is possible only within 5% for the most demanded apartments with an area of 35-50 m².
In the first half of 2022, the growth in prices in the housing market will not exceed 5-7% / photo from UNIAN, Alexander Davydov
The founder and managing partner of the DIM group of companies, Alexander Nasikovsky, believes that what 2022 will be like directly depends on the pace of recovery of the global and domestic economies, the geopolitical situation and the development of events in the energy sector, in the commodity markets. After all, this will affect the growth of prime cost, and hence the price per square meter.
“In addition, given the cyclical nature of the market and the decline in construction volumes in previous periods, it is hoped that next year will be more successful for the start of new residential complexes. At least, the growth potential of the volume of new projects remains at the level of 25-30% of the volume of 2020-2021. “, – stressed Nasikovsky.
Despite the experts’ forecasts, the questions remain: “Is it worth postponing the purchase of housing, taking into account the rise in prices for it? And if you have already decided to purchase your own square meter, how to do it correctly so as not to” burn out “?”
Director of the construction company “Budova” (Odessa) Nikolai Kutsak believes that buying an apartment should not be postponed.
“Prices will only rise. There are no prerequisites for otherwise. And most importantly, choose a construction company investing in innovative technologies. This is a guarantee that your investments will work for the future,” Kutsak emphasized.
The main advice of the founder and managing partner of the DIM group of companies Nasikovsky is to be vigilant. When choosing housing, it is imperative to take into account the concept and format of the residential complex, its architectural identity, spatial zoning, infrastructure, planning solutions, aesthetics of exteriors and interiors.
When choosing housing, you need to take into account the concept and format of the complex / photo UNIAN, Dmitry Alekhin
“The era of square meters is gone, the time has come for living ecosystems, development environments, and comfort. Now the space for life is not limited only to an apartment, but consists of hundreds of details, ranging from the interior and spatial zoning, an exquisite lobby with a designer renovation, and completing the organization of places. leisure, social infrastructure, recreational spaces on the territory “, – stressed Nasikovsky.
According to him, one should also take into account the pace of construction on the site, be interested in the quality, environmental friendliness and durability of the materials used by the developer, and closely monitor its operating principles. It will not be superfluous to study the previous experience of the company, the number of leased houses in the portfolio, and talk with residents of ready-made complexes. This will help form a better picture of the after-sales service, which is also very important.
And then – go ahead, buying a home.