What happens to real estate prices - February 2019
Many experts on new buildings say that from January 2018 to January 2019, the average price per square meter in the capital increased by 6.76%. And the cheapest apartments in Kiev, which developers are now selling at 16.3 thousand UAH. per square meter, - increased by 11%.
Realtors working in the secondary market of apartments, state the increase in minimum prices by 20%. Sellers of apartments, seeing how famously the prices of real estate on the primary rise, just do not want to lag behind. Their logic is simple - we will increase to the maximum, and there life will show: “Retreat or advance!”
Why are property prices rising?
1. The dollar rate. The depreciation of the dollar by 5% made it possible to raise prices for building materials and related services.
2. Shortage of labor. The post-New Year outflow of labor to the markets of other states provoked an increase in the rates of the proposed construction vacancies.
3. Elections. The increase in real estate prices is a certain promise of developers who demonstrate the hope that the elected head of state will take care of the economy. And they, in turn, are ready to support the candidate who intends to bring the country out of the impasse of the war.
4. The threshold of the global crisis. Economists are trying to raise prices on the eve of the crisis in order for it to fall. Many believe that the ten-year growth of the world economy should end. Their opinion is based on 10 years of cyclical nature of this phenomenon, although such a tool is used with global interests. Most likely, 2019 will pass without global financial turmoil, since US presidential elections as much as November 3, 2020, and the recent drop in stocks on the US stock market is just a pen test on the eve of the disaster.
What will happen to real estate prices in the spring of 2019?
Let's take only two factors affecting the growth of real estate prices: the dollar exchange rate and the ability to accumulate money by the population.
Dollar rate The IMF asked Ukraine to lay in the maximum to 29.40 UAH. And if it is recorded in the budget, then it will be so. The February strengthening of the hryvnia led to a rise in prices in construction. It’s like an indicator, buying means the hryvnia has strengthened, not buying it means it’s worth it. The economy does not move without hesitation.
The ability to accumulate money by the population is an important indicator for our economy. During the strengthening of the hryvnia, there is an accumulation of currency among the population. In order to increase the size of savings, it is necessary to increase the volume of segments of the economy, while the labor market must suffer from a shortage of labor, but in reality the labor market suffers because of low wages and as a result of mass labor emigration from Ukraine. In the context of winter prices for communal prices, many are looking at tomorrow with pessimism.
In connection with the foregoing, the TORRO team sees no global basis for the growth in property prices. Over time, the accumulated offer will begin to put pressure on prices both on pervichka and on the secondary market. The experience of developers formed in recent years shows that it does not make sense to drive the market into stagnation for more than 4 months.