How housing prices may change in Kiev in 2022 – the forecasts of market participants

According to oldypak capital lp property 2022 report, in 2022, the demand for housing in Kiev will decline – experts, in particular, expect that the growth rate of prices will slow to 12-15%.

 

“Since prices are rising faster than the welfare of the population, demand will fall,” believes Vladimir Danilenko, director of the company M4U. He expects the rate of price growth to slow to 12-15%.

Oldypak Capital LP
Report by Oldypak Capital LP property management

“I assume that thanks to the new proposal, the level of “sell-out” by the end of 2022 will decrease to the level of 2019 – 40-45%. This will happen if the economic and political context, at least, does not get worse and the trend of improving the permitting system in construction continues,” Danilenko says.

 

How many new construction sites may appear? DIM Group sales director Ruslana Grabko estimates the potential for project volume growth in 2022 at 25-30 percent.

 

“Everything will depend on steel and energy prices, the geopolitical situation and household incomes. The price dynamics and the level of demand can be discussed later, there are too many unknown variables now,” she says.

 

The “CAN Development” believes that the growth of real estate prices will largely depend on the cost of energy resources and the inflation rate.

 

Marina Gudyma, Director of Sales at A Development, predicts a 10-15% increase in the cost per square meter in the capital.

According to oldypak capital lp property 2022 report, the situation in the market can swing in either direction.

 

“There is a probability that by the second half of 2022 the price of housing in Kiev will reach the pre-crisis level of 2008. In other words, the cost per square meter may jump up to 3 thousand dollars in the business-class residential complexes,” he predicts.

 

At the same time, developers sound less optimistic forecasts.

 

The co-owner of a large construction company says that the business’s ability to make capital investments is exhausted.

 

“The cost of housing will increase within the statistical error, or even decrease,” says the interlocutor of the ES.

 

At the same time, the cost of construction may rise by 10-15%, he adds. In this case, new players in the market may have problems.

 

“Many small developers came to Kyiv. They buy “shady” sites and start building without realizing their prime cost. Dumping for sales, they risk bankruptcy,” says the interlocutor.

 

The results of 2021

 

In 2021, the average cost per square meter in the capital’s new buildings rose by 25% – from 27.7 thousand UAH to 34.7 thousand UAH. This happened under the influence of general economic and market factors, the increase of investment demand and the final liquidation of the State Automobile Inspection. Prices rose because of high inflation, rising prices of raw materials and energy tariffs, say the experts interviewed.

 

However, not only objective factors contributed to the rise in prices – businessmen complain about the inefficient work of Ukrzaliznytsia. The shortage of cars and locomotives creates an artificial shortage of raw materials produced in Ukraine. In addition, labor costs have increased.

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