Why housing is becoming more expensive in Ukraine: where are the highest property prices?

In the event of a full-scale war, real estate in Ukraine remains an area of ​​clear reflection of the social and demographic processes that have seriously changed our country. However, experts say that housing prices develop differently in different regions. What affects the housing market in Ukraine and in which cities of our region the square meter is the most expensive, all this is discussed in our material.

Why are housing prices in Ukraine becoming more and more expensive? Photo from Open Source

Real estate market trends in 2024

The stability and dynamism of the Ukrainian real estate market will continue to amaze in 2024, especially against the backdrop of external factors, including ongoing military conflict and economic turmoil.

precious Character “The main drivers of the real estate market are military personnel, beneficiaries of government housing programs and families relocating from conflict zones,” said Anna Savki-Volkoshevets, director of the Liberty real estate agency. “These categories of buyers and tenants provide a special impetus to the market, adapting it to existing conditions and needs.”

Experts believe that on the one hand, we see regional changes in real estate dynamics: large cities such as Kiev have seen a drop in demand, while interest in buying homes has increased in the western regions. The term “war price” was coined in the conflict-affected regions, which significantly affects real estate values ​​and the decisions of potential investors.

Government housing programs, including subsidies and special mortgage offers, maintain market stability and citizen confidence in the market. Statistics show that military families actively participate in these programs, highlighting their importance in the nation’s housing sector.

Anna Savka-Volkoshevets said that despite the active primary market, the majority of transactions were completed by the secondary market due to the availability of homes that can be moved into immediately. Buyers choose properties that have already been renovated, which shows that they want to avoid additional costs and efforts. Developers offer promotions and installment plans, but transparency of documentation and readiness of residential properties remain key selection criteria.

External factors, such as escalating hostilities or power outages, have a significant impact on the decisions of buyers and sellers. However, government housing programs provide a certain stability and security, allowing the market to adapt to new conditions.

The real estate agent also noted that property prices, while they have stabilized, have no clear reason to grow as there are no usual drivers such as inflation or currency fluctuations. Rental demand is rising as many people seek quality housing in uncertain times but without a long-term commitment. At the same time, selling can be beneficial for those who want to improve their living conditions or avoid high rental stress.

Real estate experts concluded that citizens should consider personal circumstances and market conditions when deciding to buy, rent or sell, avoid impulsive behavior and make wise choices.

Ukraine house prices rise

Residential real estate prices in Ukraine rose sharply in the first quarter of 2024. dataAverage housing costs increased by 16.0% compared to last year, with the largest increases in the first-hand apartment market. The increase in house prices is five times higher than the official annual inflation rate of 3.2%, indicating a volatile market.

In detail, prices in the one-room market increased by 17.8%, and in the two-room market by 15.9%. For two- and three-room apartments, the main changes were 17.5% and 17.9%, respectively, and the secondary changes were 15.2% and 15.5%. This dynamic reflects the changes in market supply and demand under martial law and the increase in the number of internally displaced persons, especially in the western and central regions, with record price increases in Lviv.

The National Bank of Ukraine noted that the real estate market is gradually recovering, although it stressed that this recovery mainly concerns the secondary market. Character “The number of transactions in the real estate market is growing, but remains below pre-war indicators,” said Pervin Dadashova, director of the NBU’s Financial Stability Department. “This demonstrates the prudence and common sense of buyers, who make plans against a backdrop of nationwide uncertainty and take into account the possibility of further changes in the country’s socio-economic situation.”

How much does housing cost per square meter in the Ukrainian region?

As of April 2024, the highest average cost of housing per square meter in the primary market was in the capital, amounting to UAH 53,737 (considering all types of apartments by the number of rooms). If we analyze the cost per square meter over the year, the Zhytomyr region saw the largest price increase (UAH 28,271) – 32%. Prices also rose significantly in the Ivano-Frankivsk region – by 26% (UAH 31,504), in the Rivne (UAH 34,566) and Cherkasy (UAH 30,292) regions – by 24% and 21%.

In the first half of 2024, there were significant changes in the regional distribution of quotations and prices on the secondary market of real estate in Ukraine. Information provided by the Ukrainian Platform Analysis Center bitshowing that the number of offers for sale of second-hand houses increased in almost all regions of the country during March 2024. It is noteworthy that the supply in the Ivano-Frankivsk region increased by 65%, and in the Volyn and Zhytomyr regions by 53-54%. This shows that the real estate market is regaining vitality after a period of stagnation.

The increase in the number of proposals, especially in the western regions, can be explained by the increase in the number of internally displaced persons leaving the conflict zone in search of new housing. However, the increase was not seen in all regions: for example, the number of offers in the Poltava region decreased by 21%, and in the Chernivtsi region by 12%.

The overall cost of housing has also increased across Ukraine, with the Volyn region seeing the biggest increase in one-room apartment prices, up 19%, the study showed. This price dynamic suggests a growing demand for smaller apartments, likely due to a shift in housing preferences amid economic uncertainty.

Kiev and its surroundings remain the leaders in real estate prices. The average cost of a one-bedroom apartment in the capital is $93,168, which is significantly higher than prices in other regions. The prices in the Lviv region and Zakarpattia are $69,680 and $53,401, respectively, highlighting the regional differences in pricing. Kharkiv suffered the most during the total war and, due to its geographical location, was frequently bombarded: a one-bedroom apartment here on the city’s secondary market can be purchased for $10-12 thousand, which is almost 2 times lower than the usual pre-war price.

The Ukrainian real estate market continues to adapt to the challenges of our time, showing regional changes in supply and prices, as well as new interest in the secondary market. Against this backdrop of change, the consumer preferences of the population are also shifting, affecting the overall dynamics of the market.

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