Analysts from the investment and development company City One Development have summarized the results of the primary real estate market in the capital for the first six months of 2023 and identified the following trends:
In 2022, the average price in Kyiv’s primary market during the first year of the war increased by +4% due to rising costs and material shortages, increased risks, generator usage, and the complications and costliness of construction processes. Despite the dollar exchange rate rising from 27 to 37 UAH/USD over the year, developers increased prices in the primary residential market in dollar equivalent.
In the first half of 2023, the average price in Kyiv’s primary market decreased by -4% to approximately pre-war levels, amounting to $1955/sq.m. Developers have had to react to reduced demand. The average price decreased even though the dollar exchange rate remained the same as at the beginning of the year – 37 UAH/USD.
The decrease in the average price in the market was primarily driven by the luxury segments:
Premium class -10% Business class -7% In the budget segments, there was a slight continuing increase in prices on average:
Economy class +2% Comfort class +1% The price dynamics reflect the situation in the segments. In the budget segments, demand allows for maintaining or increasing price levels. Reduced demand in the expensive segments forces developers not only to refrain from raising prices as construction progresses, but also to lower price ranges and offer discounts on projects in early and mid-stage development.
Demand in the primary market remains largely postponed due to missile strike risks, extended construction timelines, and reduced incomes for many potential buyers. People who previously invested in early-stage construction are waiting for the war to end and for stability to return. However, now is the most advantageous time to evaluate developers and recognize companies that continue to actively construct projects, demonstrating their stability and reliability on construction sites. There is no doubt that after Victory and stabilization of the situation, demand will recover, and prices will continue to rise.
The market volume continues to shrink. Many projects are sold out, and only a small number of new projects are entering the market, typically within already ongoing projects – as part of new phases of construction. For comparison, before the war, in the analytical database of the primary real estate market in Kyiv, City One Development had records for 192 residential complexes. By the end of 2022, there were 157, and in mid-2023, there were 151.
The pace of construction of residential complexes has slowed down – the delivery timelines for projects have shifted: initially declared deadlines are being postponed by six months to a year, and on some projects, even longer.
Traditionally, the Pecherskyi district leads in Kyiv in terms of housing prices and the number of residential complexes under construction. In the Pecherskyi district, there are almost as many residential complexes for sale (28) as on the entire Left Bank (29). Meanwhile, the price in Pecherskyi district ($3402/sq.m) is nearly three times higher than the average on the Left Bank of the capital ($1207/sq.m).