Residential real estate prices in Kyiv grew by more than 30 percent last year, but prices are beginning to stabilize, indicating that supply may have finally caught up with demand.
“The pace of price growth is slowing,” said Ludmyla Zabiyaka, of Kyiv’s Blagovest real estate agency.
Zabiyaka said that prices for new apartments have risen by 10 percent, on average, since the beginning of the year. However, since April, prices have been fairly stable, rising by only one percent. Meanwhile, prices for apartments in Soviet-built and pre-revolutionary buildings have grown by only two percent since the beginning of the year.
“If you look at older apartments, like Krushchevkas, prices are beginning to fall.
“Prices on older apartments grew sharply last year, but now they are falling because there are many new apartments available,” Zabiyaka added. “Buyers also have better access to bank loans today, which means they can afford to buy new apartments.”
According to data on the Web-based real estate portal www.realt.kiev.ua, prices for residential real estate in both old and new buildings fell during mid-May. According to the portal, old and new apartments decreased slightly in price, and lease prices also fell.
Serhy Zlyden, chairman of the Kyiv branch of the Ukrainian Association of Real Estate Specialists, said the residential real estate market is stabilizing, although he doubts that prices for apartments in new buildings will actually drop this year.
“A surge in earnings has fueled the residential real estate market, but now there’s a healthy balance between supply and demand,” Zlyden said.
Zlyden predicts that residential real estate prices will remain stable until the presidential elections, after which they will rise slowly.
The passage of planned legislation governing real estate will bring more foreign investors into the market, and continuing economic growth will raise the population’s purchasing power, he added, with the result that prices are unlikely to drop significantly.
Zabiyaka agrees that prices will continue to rise, albeit at a slower rate.
“Prices last year grew a lot,” she said. “I don’t think prices [for new buildings] will fall this year as there’s still demand on the market, but prices won’t continue to rise at the rate that we’ve seen.”
Zabiyaka said demand for apartments will remain high, as Ukrainians from other cities continue moving to the capital in search of better employment. “New two-room apartments, designed for the city’s emerging middle-class workforce, are in high demand now,” she added.
Developers are expected to put up one million square meters of new residential space this year, about the amount they have built in each of the past three years.
Real estate in other Ukrainian cities remains a bargain, Zabiyaka said. Prices have been growing aggressively in recent years, but they remain far below prices in the capital.
