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Market analyst Viktoriia Bereshchak shared in an exclusive commentary with Novyny.LIVE editorial team what buyers and sellers should prepare for in 2025.
The real estate market has faced significant challenges due to the full-scale war. The consequences have not yet been fully overcome, considering the rising cost of housing, decreased demand, falling real purchasing power, and so on.
What will happen to prices in the primary market
It is difficult to predict the situation in the long term, as the market reacts to geopolitical events. This includes, in particular, the newly elected US President Donald Trump and his White House policies. Based on objective factors independent of the international arena, it can be assumed that the weighted average price increase will be a maximum of 15% per year in total.
The construction cost in 2023 increased by at least 45-47%. This refers to the higher cost of materials and construction and installation works. At the same time, we have practically zero demand for real estate. In certain segments, it is concentrated at up to 20%. And that’s given a combination of factors,” the expert noted.
These include a good reputation of the developer who continues to build and fulfill their obligations despite regular missile attacks, damage to the energy infrastructure, etc. It also includes the product’s compliance with consumer expectations, who have started to focus on:
- multifunctional block-clusters;
- closed-type recreational complexes with a mix of infrastructure.
Buyers will face rising real estate prices in 2025, provided that a relatively stable market situation is maintained. The 15% forecast may be adjusted upwards if there is a loss of production capacities in various construction material sectors. Or in case of mobilization processes that will intensify the shortage of skilled labor.
I believe that 2025 will be decisive for developers. We will clearly see who has the potential to continue to stay in the market, develop, and be a full-fledged player, and who has started their path to self-destruction or, in other words, voluntary exit from the market,” stated Viktoriia Bereshchak.
What to expect in the secondary market
The secondary real estate market generally depends on the human factor. If there are new internal migration shifts, both rental and purchase-and-sale activities will revive in the regions. Large hub cities, particularly Lviv and Kyiv, have more active markets. As the practice of 2024 showed, considering the dollar exchange rate and other factors, liquid one-room apartments may increase in price by 10-12%, and two- and three-room apartments by about 6-8% per year.
Regarding eOselya, the program may remain a driver if there is sufficient funding. Moreover, stable funding, without revisions to the decision on fund allocation. It is necessary to allocate at least 17-20 billion hryvnias annually for eOselya,” the analyst added.
However, the purchasing power of Ukrainians should be considered. It has decreased because people are psychologically unprepared to invest large sums in square meters due to the uncertainty of events in the geopolitical arena around Ukraine. An optimistic scenario would be if it is possible to regain at least 10-15% in the overall demand structure, i.e., in sales.
The expert is confident that developers will not find a way to reconfigure their business processes to avoid being solely dependent on buyer money for continued construction. It is necessary to seek investment partners interested in building residential properties. If companies do not start cooperating with international players who are eyeing the Ukrainian market, seeing its potential after the victory, then a restructuring of developers’ activities will occur in the worst sense.
Date: 30.12.2024 Source: Novyny.LIVE