Ukrainian Property Market Is Limited Due To Insufficient Number of New Projects And High Credit Interest Rates

From 21-23 november this year, the international exhibition ,,Ярмарка Недвижимости’’ (Jamarka Nedvizhimostj) was held in Kiev, the capital of Ukraine. Andrejs Kozels, Director of the Housing Space Office of Realia Company, was among its visitors. He met with representatives of real estate companies of Ukraine and other countries and got an idea of the situation in the Ukrainian real estate market and of how much Ukrainian clients are interested in the acquisition of property in Latvia.

As you know, the political agitation is currently observed in Ukraine. A. Kozels admits that political events have also affected the course of the exhibition. The number of its visitors turned to be lower than planned before. Nonetheless, those who attended the exhibition showed their interest in Latvia. “Unlike citizens of Russia, who invest into the real estate in Latvia for the purpose of obtaining residence permits, Ukrainian clients are mostly interested in small-sized property for private needs, which can be used several times a year during vacation periods. Some potential clients were interested in small apartments in “soviet” buildings in residential districts of Riga or new projects erected in recent years. There were several visitors attracted by more expensive and exclusive property,” the specialist said.

A. Kozels has observed that most of visitors were interested in the offer in the local, Ukrainian market. He has emphasized that unlike the situation in Latvia, the economic crisis still prevails in Ukraine. Many projects are not completed or the construction process is too slow. Furthermore, such building technologies as were known in Latvia long time ago, are being introduced into the building process in Ukraine now. The market shows obvious signs of stagnation.” A. Kozels added.

One of the reasons, in A. Kozels opinion, which thwarts the progress in the property market of Ukraine, is high mortgage rates. They are really shocking, e.g., in Kiev they reach 25% per year (while in Latvia local clients are offered 2-3%, and foreigners – about 5% rates). Furthermore, mortgage loans may be obtained only in the national currency, Ukrainian hryvnias, which fact also worsens the situation.

 

„Presently we do not cause much interest of Ukrainian clients. The lack of interest is based on the fact that those who can afford buying property, prefer projects in more attractive and European regions with warm climate – Spain, Italy or Turkey,” A. Kozels concluded.

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