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Market analyst Viktoriia Bereshchak shared with the editorial staff of Novyny.LIVE her insights on what buyers and sellers should anticipate in 2025.
The real estate market has encountered significant hurdles due to the full-scale war. The repercussions have yet to be fully overcome, evidenced by escalating housing costs, diminished demand, falling real purchasing power, and other factors.
What to Expect for Prices in the Primary Market
Forecasting the long-term situation is challenging as the market is sensitive to geopolitical developments. This includes, for instance, the newly elected US President Donald Trump and his administration’s policies. Relying on objective factors independent of the international landscape, one can surmise: a weighted average price increase will likely not exceed 15% annually in aggregate.
The construction cost itself rose by at least 45-47% during 2023. This pertains to the increased expense of materials and construction-assembly works. Concurrently, we observe practically zero demand for real estate. In certain segments, it is concentrated at up to 20% and only under a confluence of favorable conditions,” noted the expert.
These conditions include a strong reputation for the developer, who continues to build and fulfill commitments despite regular missile strikes, damage to energy infrastructure, and other disruptions. It also involves the product aligning with consumer expectations, which have shifted towards focusing on:
- multifunctional block clusters;
- gated recreational complexes with integrated amenities.
Buyers will face higher real estate prices in 2025, provided a relatively stable market situation persists. The 15% projection could be adjusted upwards if there is a loss of production capacity in various construction material sectors. Alternatively, mobilization processes could exacerbate the shortage of skilled labor.
I believe 2025 will be pivotal for developers. We will clearly see who has the potential to remain in the market, grow, and be a full-fledged player, and who has embarked on a path of self-destruction or, in other words, a voluntary exit from the market,” stated Viktoriia Bereshchak.
What to Anticipate in the Secondary Market
The secondary real estate market is largely influenced by the human element. Should new internal migration trends emerge, both rental and purchase-sale activities will likely pick up in the regions. Major hub cities, such as Lviv and Kyiv, tend to have more dynamic markets. As 2024 practices have shown, considering the dollar exchange rate and other factors, liquid one-room apartments might see a price increase of around 10-12%, while two- and three-room apartments could rise by approximately 6-8% annually.
Regarding the “єОселя” program, it could remain a driving force if adequate and stable financing is provided, without revisions to funding allocation decisions. It is essential that at least 17-20 billion hryvnias are allocated to “єОселя” annually,” added the analyst.
However, it is crucial to consider the purchasing power of Ukrainians. It has diminished as people are psychologically hesitant to invest substantial funds in property due to the uncertainty of geopolitical events surrounding Ukraine. An optimistic scenario would involve recovering at least 10-15% in the overall demand structure, specifically in sales.
The expert is confident that developers will struggle to reconfigure their business processes to avoid complete reliance on buyer funds for ongoing construction. It is imperative to seek investment partners interested in developing residential properties. If companies do not begin to collaborate with international players who are observing the Ukrainian market, recognizing its potential post-victory, the business activities of developers will undergo a detrimental restructuring.
Date: 30.12.2024 Source: Novyny.LIVE