When compared with the recent stats of the Kiev, Ukraine, housing market, a 2% fall in average price per square meter in the city (now US$1,174) does not appear drastic.
But since September 2008, when the city had a booming average of US$3,627 per square meter, the fall is much more dramatic, at a 67.6% decline.
The downward trend is expected to continue through 2016, a result of weak demand in the market.
But in the midst of a struggling market (and other issues), the country’s inflation is down and its economy is strengthening.
Regardless of the lack of demand in housing, Kiev has many residential projects in construction—residential construction in the city has a value of 13.9 billion Ukrainian hryven, a 23.2% increase year over year.
Tim Louzonis of AIM Realty Kiev explains why the construction continues underway in the midst of a slow market, “Due to the hryvnia devaluation, material and labor costs for developers (mostly based in hryvnia) have decreased in dollar terms much more than housing prices (which are priced in dollars). So development projects continue despite the current economic malaise—instead of relying on bank financing, most of these developers are able to finance their projects with proceeds from ‘pre-sales’ of apartments fueled by Ukrainians’ trust in real estate and Kiev’s housing deficit.”
It was in 2014 and 2015 that Kiev’s market saw prices drop most. And it was during these years that the country’s currency became weak, a result of the ongoing war.
Those renting out their properties in Kiev are suffering along with the market—rental prices have dropped at least 50% since 2008, and demand appears to be at a steady low. This does mean, though, it is a renter’s market—if you’re looking to visit long-term, you could rent out a two-bedroom apartment in the city center for only 10,437 hryven’ (US$403 at today’s conversion rates) per month.
Although some new regulations regarding the market were implemented in December of last year, the country still remains foreign-ownership friendly.