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Market analyst Victoria Bereshchak shared in an exclusive commentary with the News.LIVE editorial team what buyers and sellers can expect 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 at a maximum of 15% per year in total.
The construction cost in 2023 increased by at least 45-47%. This refers to the rising cost of materials and construction and installation works. At the same time, we have practically zero demand for real estate. In some segments, it is concentrated at up to 20%, and only under a combination of factors, — noted the expert.
This includes a good reputation of the developer who continues to build and fulfill their commitments despite regular missile attacks, damage to energy infrastructure, etc. It also includes the product’s compliance with consumer expectations, who have begun to focus on:
- multifunctional quarter-clusters;
- closed-type recreational complexes with a mix of infrastructure.
Buyers will face rising real estate prices in 2025, provided that the situation in the market remains relatively stable. The 15% forecast may be adjusted upwards if there is a loss of production capacity in various construction material sectors. Or in case of mobilization processes that exacerbate the shortage of skilled labor.
I believe that 2025 will be decisive for developers. We will clearly see who has the potential to remain in the market, develop, and be a full-fledged player, and who has begun their path to self-destruction or, in other words, a voluntary exit from the market, — stated Victoria 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-sale activities will revive in the regions. Large hub cities, such as Lviv and Kyiv, have more active markets. As practice in 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 “єОселя,” the program can remain a driver if there is sufficient funding. Moreover, stable funding without revising decisions on allocating funds. It is necessary to allocate at least 17-20 billion hryvnias annually for “єОселя,” — added the analyst.
However, the purchasing power of Ukrainians should be considered. It has decreased because people are psychologically not ready 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 the capacity to restructure their business processes to avoid being solely dependent on buyer’s 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 looking at the Ukrainian market because they see potential in it after the victory, there will be a restructuring of developers’ activities in the worst sense.
Date: 30.12.2024 Source: News.LIVE