Prices on apartments, cars and just above everything else – with the exception of pricey imports – are diving.
While more people are honing their job-hunting skills in this global economic crisis, others – those with jobs, salaries, savings or a healthy credit line – are becoming expert bargain hunters.
The deals seem to be everywhere and on everything in Kyiv, with the glaring exception of pricey imports. The sales are getting too good to miss. And they’re expected to get even better as plunging consumer demand transforms the economy into a buyer’s market.
Sellers are offering deep discounts just to stay afloat and, yes, many will haggle with buyers over price.
Cars, apartments and air tickets are just a few of the items selling for much less than their “pre-crisis” prices. Same story with food, from McDonald’s cheeseburgers to sushi, as fast-food joints and restaurants trot out “anti-crisis” menus to fill seats.
Jewelry, clothes, furniture and foreign-language classes can also be had for less.
With worries running high over family incomes and job security, people are not willing to part with their cash, said Tetiana Sytnyk, analyst at GFK Ukraine, a market research company.
Some costly “products [such as cars] that have more of an investment character will be hit hard, especially imported goods that are more expensive because of the hryvnia devaluation,” Sytnyk said. The hryvnia has declined by 40 percent against the dollar since last summer, pricing imports out of the reach of more shoppers.
But not everybody is in a position to cash in on the current deals.
Official joblessness in Ukraine has doubled since the crisis broke, to about 1 million people, and is expected to go even higher. Many of those who kept their jobs have taken pay cuts.
The downturn has left many jobless – and traditionally hard-luck segments such as university students – window shopping only.
Angelina Rakhmatova, a student at the National Aviation University, said she’s simply not spending. “I try to save these days, so I don’t feel the discounts very much,” Rakhmatova said. “So I walk and drool over” all the discount signs.
With car sales expected to plunge more than threefold this year, almost every dealer has had to resort to some kind of gimmick and special offer.
A Renault Megane is now sold for Hr 123,900, compared to its pre-crisis price of Hr 140,800, dealers said.
Japan’s Mitsubishi is offering up to 20 percent discounts on its cars. One of the most popular models, Mitsubishi Lancer 2009, now costs Hr 135,443 – or Hr 35,000 less than before.
In this economic battlefield, there are winners and losers all over the place.
Photographer Vitaliy Pavlenko was lucky twice. He sold his car for dollars in October and decided to upgrade. He managed to buy a much better automible in December because the hryvnia had declined so rapidly by then, and because the retailer discounted his car by almost $3,000.
“We didn’t have time to [immediately] buy a new car, and so we delayed the purchase until December, when dollar became 10 [Hr/$1],” he says. “I won on the rate and discount. During regular times, they wouldn’t give me a discount this high.”
Kyiv’s real estate, probably one of the most overpriced sectors, has deflated almost as sharply in the last year as it inflated starting in 2002 and the launch of the ill-fated credit boom.
The market peaked in the summer of 2008 at an average of $3,000 persquare meter, making apartments unaffordable as prices raced ahead of incomes and credit lines.
But with the economic downturn, apartments have become much more affordable, especially at the outskirts of Kyiv, where prices dropped by more than a half, said Serhiy Kostytskiy, analyst at SV Development.
Kostytskiy added that even though “most popular apartments are sold for $1,300 per square meter, you can bargain a discount up to 30 percent and more from the originally requested price.”
Mykhailo Polyntsev, an analyst at real estate agency Planet Obolon, said: “Up until the crisis started, the cheapest apartment in Kyiv was around $60,000. Now it can be bought for $25,000. Now you can buy a decent apartment not far from the center of a livable size for the same $60,000.”
The real estate market is not expected to bottom out until this fall, SV Development’s Kostytskiy forecasts.
Not only housing and transport are becoming more affordable for average people. Some food is getting cheaper, too.
McDonald’s, the fast food chain, is selling cheeseburgers for Hr 5.50, which is Hr 1 less than before. “Now customers pay more attention to the price,” said Mykhaylo Shuranov, spokesperson in Ukraine for McDonald’s. Shuranov said that the discounts, combined with the arrival of spring and the recent hryvnia stability against the dollar, have resulted in an “optimistic April” in terms of sales.
Many other examples abound. For those who prefer Japanese food, an “anti-crisis” menu by Yakitoriya restaurant offers 20 percent discounts on some of the most popular dishes.
Now may also be a good time to start learning a foreign language. Speak Up language school offers discounts of up to 60 percent for students and unemployed, dropping the price to Hr 1,500 per quarter.
For those seeking to get away from Kyiv or Ukraine, travel hasn’t been this cheap for awhile.
Aerosvit has blitzed the city with its “Crazy Friday” promotion campaign. For just $29, you can fly one-way to many major cities in Ukraine; medium distance one-way flights cost $99; and round-trip long-distance tickets are $399, including airport fees. The prices are valid every other Friday; the next promotional prices are on April 24. But Aerosvit is far from alone in offering deals, as the entire travel and tourism industry is reeling from the global slump.
So after buying a car, apartment and spending less at McDonald’s and for a getaway vacation, what else is left? How about an apartment makeover?
With an abundance of jobless builders around, prices for construction services are at the level of 2006 and even lower. According to the specialized website, www.stroimdom.com.ua, to install a bathtub, for example, you would have to pay Hr 200-Hr 300. Last year, the same service cost at least double.
Also, before the recession, buying furniture from Kiyanka Nova mall in Kyiv, near Metro Klovska, would cause many customers to think twice.
But with the “gallery of discounts” campaign offering up to 40 percent reductions to compensate for the deflated hryvnia, shoppers may find it affordable to purchase quality furniture from Italy, Germany or Spain. “Sometimes, the discounts can go up to 50-60 percent,” said Maryna Doroshuk, a spokesperson at Kiyanka Nova.
Shoppers can also unwind and celebrate a good bargain hunt with a bottle of wine from the Good Wine store in Kiyanka Nova. They offer wines such as Italian Telero Salento Bianco for Hr 38. Or try a French Cabernet from Auchan hypermarket for Hr 34, an unheard of price a year ago.
Meanwhile the bargains don’t seem to be cheering up consumers that much. Surveys conducted by GFK market researchers say the consumer mood remains gloomy. However, people’s economic expectations are recently starting to brighten a bit, according to GFK.
With deals like these around, no wonder.
