Forecast of the Ukrainian real estate market for the first quarter of 2019
Throughout its history, the real estate market of Ukraine has experienced various situations, so the population knows how to respond in difficult market conditions, and make informed decisions.
The first week of martial law showed the action of inert processes: the economic activities of developers take place in the usual mode, the objects are implemented in accordance with the planned business plans, buyers in the secondary real estate market fulfilled their obligations to the seller.
The second week showed a fading of the primary and secondary real estate market with an estimated forced pause. The buyer apparently decided not to spend the savings, because There is no hope on the air for the fulfillment of the presidential obligations on the lifting of martial law since December 27, 2018.
Now consider what happens next?
In case of cancellation of martial law from 12/27/2018 in fact, the market will be already in the “New Year holidays”, and until the last decade of January 2019. hardly something will change. Almost from February we can expect a smooth recovery of the market.
In the case of the extension of martial law for another month, the market will not change either. Not only does he hope that he will earn in February either, because MPs will just be on vacation. Accordingly, what will happen in March, whether it will be extended or not, does not matter, because electoral presidential race will be in full swing. During this period, real estate prices will roll back again in the range of 5-10%. What do financiers say?
What do financiers think?
A number of financial experts, at the time of the imposition of martial law in Ukraine, suggested that even a short period of martial law of 30 days and the upcoming presidential elections could lead to a further increase in the US dollar exchange rate. This may be reflected in the cost per square meter in new buildings, as suppliers of building materials index the price of supplies. As you can see, the course at the end of December is stable, as promised by the Guarantor!
What do economists think?
The introduction of martial law, even in certain territories, has a negative impact on investment attractiveness. This is a serious political risk. With increased political risks associated with the introduction of the EaP, real estate investments are more likely to decline.
What happens to foreign investors?
Despite clear assurances from international financial lenders and other financial institutions about further work with Ukraine in all projects without changes, the stock market reacted negatively - the cost of Ukrainian debt securities decreased, and their profitability increased. This is a clear illustration: international investors re-evaluated risks in relation to investments in Ukraine in the direction of their increase.
Naturally, such an assessment will negatively affect the inflow of investments into the economy. Investors are likely to freeze for some time most of the projects, especially long-term and related to investing in real estate and infrastructure facilities.
In general, the main factor that will affect all markets is uncertainty.
The effect of martial law, which also coincides with the presidential election and the season of the New Year holidays, will play more as an additional factor in reducing demand.
Potential real estate market forecast for the first quarter of 2019.
According to TORRO experts, a potential buyer who was planning to buy an apartment will postpone the purchase for a while. Accordingly, the demand for Kevartira will fall.
In turn, we can expect an increase in offers in the secondary market, which will appear on the market under the influence of a decrease (lack of) sales. Regardless of who will be elected to the presidency, the buyer will begin to buy the sagging property. For April-May 2019 the market will come out in prices that were before the imposition of martial law.