Buying property with cash gains favor amid credit crunch
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.