Buy­ing prop­erty with cash gains fa­vor amid credit crunch

Kyiv Post - - Business Focus - Kyiv Post staff writer Ilya Timtchenko can be reached at [email protected] com.

the coun­try. “There is a lack of qual­i­fied (gov­ern­ment) man­agers,” the UDP founder says. “In­stead of sim­pli­fy­ing ev­ery­thing, it is be­com­ing more dif­fi­cult.”

In 2014, UDP op­er­ated with 211,300 square me­ters of apart­ment space, sell­ing around 600 apart­ments, 1.5 times less than the pre­vi­ous year.

The gen­eral trend in mar­ket de­mand de­creased by three times in 2014. “This is be­cause the dollar went up three times,” said Ihor Kush­nir, pres­i­dent of Kyivmiskbu­d, one of the na­tion’s big­gest real es­tate de­vel­op­ers with 300 em­ploy­ees serv­ing up to 500 con­tracts each month.

How­ever, last year the com­pany op­er­ated 302,000 square me­ters of apart­ment space, 18 per­cent higher than in 2013.

“Apart­ments are bought ei­ther by refugees (from eastern Ukraine) or by peo­ple that don’t be­lieve in the bank sys­tem and take out their sav­ings to in­vest into square me­ters,” Kush­nir says.

“Real es­tate is re­lated mainly to the sit­u­a­tion in the east, and not so much with the eco­nomic sit­u­a­tion,” UkrBud’s Mik­i­tas says.

For ex­am­ple, re­cently many peo­ple were afraid that the war in Ukraine’s east would es­ca­late af­ter the first days of the May hol­i­days, Mik­i­tas said. But once they didn’t see any sub­stan­tial Rus­sian ag­gres­sion, their con­fi­dence in the hryv­nia went up, and thus in the apart­ment sec­tor as well.

Over­all, some in­dus­try ex­perts ex­pect the po­lit­i­cal and eco­nomic con­di­tions to sta­bi­lize. “We are ob­serv­ing a light re­cov­ery of the mar­ket,” Mik­i­tas said.

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