Ukraine’s chaotic real es­tate mar­ket

Kyiv Post Legal Quarterly - - Contents -

It’s the Wild West in Kyiv’s real es­tate mar­ket – big gains or painful losses.

While the govern­ment fails to pro­vide strict con­struc­tion rules and pro­tect its his­toric ar­chi­tec­ture, many real es­tate firms are tak­ing ad­van­tage of the sit­u­a­tion.

Some are build­ing multi-story “mon­sters” in the heart of Ukraine’s cul­tural her­itage, some are try­ing to quickly cash in on poor qual­ity con­struc­tions, some falsely prom­ise to in­clude so­cial in­fras­truc­ture in their de­vel­op­ment plans to lure in buy­ers, while others plan to stay closely con­nected to the govern­ment and gain pref­er­ences from the state.

De­spite the law­less­ness, the real es­tate sec­tor is show­ing stronger signs of re­cov­ery and sta­bil­ity: Kyiv’s of­fice mar­ket has been show­ing the low­est lev­els of va­cancy since 2008 and, with a hike in prices, re­tail va­cancy rates are at an all-time low since 2013. In­vestors are show­ing a grow­ing ap­petite for com­mer­cial build­ings – most notably the IT sec­tor.

But the prob­lem in Kyiv’s real es­tate mar­ket is as it is with ev­ery mar­ket in the city – with­out strong rule of law and the pun­ish­ment of wrong­do­ers, the mar­ket will con­tinue to be a high-risk busi­ness.

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