The city's wealthiest residents are putting a premium on privacy and driving demand for single-family houses
v over the last several years, and real estate industry sources say that there is no sign that the trend will reverse any time soon.
The capital’s wealthiest residents are looking for sophistication, comfort, elegance and privacy beyond what even the best apartments can afford, and are opting to build single-family homes instead.
Analysts say that the situation on the home construction market has changed dramatically since the mid-90s, when there were only a handful of luxury homes built on the outskirts of Kyiv.
Now, an increase in the buying power among the city’s most affluent is spurring the growth of what had literally started out as a “cottage industry.”
“A few years ago, there were only three or four good houses built in Kyiv,” said Yury Samoylovych, head of Arkada-Termodom, a residential construction company. “I would say that today’s rate of construction approaches 300 homes per year.”
Samoylovych said, however, that it is more appropriate to measure growth in the home construction industry using qualitative, rather than quantitative, indicators.
He said that Kyivans who can afford to spare no costs to obtain homes built to the highest standards of comfort and quality, and often opt for more expensive building materials, whether imported or domestic. They also are willing to pay more for quality work by professional architects, rather than attempting to design homes themselves. Samoylovych said that this trend has also improved the level of service provided by construction companies.
“Several years ago, Ukrainian construction companies didn’t know how to build, we didn’t have modern equipment or quality materials, and lacked money,” Samoylovych said. “One could start building a house without a clear picture of how it would finally look.”
He said that today, the availability of modern equipment makes it possible to build homes in the city’s outlying districts that are almost entirely self-contained. Many have their own electrical, gas and water-supply systems.
However, experts were unanimous on one point: If there is one thing that is holding back the dynamic development of the home construction sector, it’s the lack of options that would enable people with lower incomes to obtain mortgages and buy their own homes.
They say that this applies to the majority of Ukraine’s population.
Dollars for domus
Experts say that the cost of building a home can be moderate compared with the cost of living space in multi-story apartment buildings.
“Sometimes it is cheaper to build a separate house than to buy an apartment,” Samoylovych said. “A multistory home can cost between $600 and $1,000 per square meter. That’s about the same as an apartment without interior design, which makes [the apartment] quite expensive by comparison. The price of a separate house already includes the cost of interior design, with heating, a water-supply system and the rest.”
Specialists estimate that the minimum price for new home construction, including the cost of installing plumbing and finishing the interior, is about $400 to $500 per square meter.
But that’s just the minimum.
“The maximum price is unlimited. It depends only on the customer’s needs,” Samoylovich said. He said that a typical customer wants a house that is between 200 and 350 square meters in size, built on about 400 to 900 square meters of land. Land parcels outside the city are typically larger.
But a customer who contemplates moving from a multi-story complex into a new home needs to take into consideration not only the cost of installing things like a boiler and water-supply system, but location as well, he said.
In Tsarske Selo, Kyiv’s most expensive district, a 100-square-meter land plot costs between $20,000 and $25,000. Meanwhile, the same-sized plot in Pechersk, also considered one of the city’s better districts, costs between $10,000 and $15,000. Land in districts further from the center is much less, going for $6,000 to $8,000.
Experts agree that generally the further from the center of Kyiv, the less expensive land will be. The notable exceptions are in the exclusive Nyvky and Koncha Zaspa districts, where 100 square meters of land costs from $3,000 to $5,000. Since Soviet times, these districts have been considered the domain of the country’s ruling elite.
Not surprisingly, proximity to a forest, river or convenient transportation links can influence the price of land, while surrounding factories and other industrial constructs significantly decrease land prices.
Bonus for the bourgeoisie
Because there are still relatively few Ukrainians in the market for their own home, only about 10 construction companies specialize in residential construction. Competition among them is fierce.
Those people who want to build their own home can announce a tender in a newspaper, and will receive bids from at least four or five construction companies, industry sources say.
“We give a client a warranty of several years for new construction,” said Vitaly Strelnikov, director of Vakan Construction.
“We live in times of capitalism and we have to fight for our customers. We need to prove that we are the best every day,” he said.
Insiders say that only those firms that have managed to consolidate their grip on the residential market are truly successful, building between 15 and 20 homes annually. The remainder offer home-repair services and do remodeling work to survive.
“[Ukraine lacks] the middle class that is the foundation of the economy in any country. That’s why it is much easier to find people for expensive habitations than for cheap ones. We do have rich people who buy expensive houses,” he added.
He said that most of his company’s clients are business people and entrepreneurs in the grain-trading, computer and banking industries.
The typical client “is a businessman, the first or second person in a successful company. Mainly they are Ukrainians. Just a few foreigners build houses here,” Samoylovich said.
