Until recently, Ukraine real estate attracted second-largest volume of foreign and domestic investments following the financial sector. At the time main materials of this article written (May, 2009), the once-booming Ukrainian real estate market is going through its bad period. Due to the world financial crisis developers and investors into Ukraine real estate were faced with big economic troubles. As a result, many construction projects were frozen and number of them are "for sale" now.
Have you ever noticed, when you turn on the news they usually have to tell you the bad news first. Then, if they have time, they might will tell a "feel good" story at the end. The same can be said about the way the media is portraying conditions on the Ukraine real estate market. Everywhere you can hear how terrible the Ukraine investment market is. Bad news SELLS.
In no way I am a real estate specialist. But let's just try to invite our common sense and ask a real estate professional's opinion. Our common sense tells us that sooner or later economy will get better. Everything goes in circles. -:) What about professionals? Here is opinion of one of the brightest among them - Donald Trump.
"If you're one of the fortunate few who is looking to buy, you could hardly be in a better position. I think the housing market is going to get better and it's going to get better fairly quickly. The market is depressed and that's when you want to go in. So if you have the money, now's when you want to go out and buy. But that's just my opinion. After all, what does Donald Trump know about real estate!
Smart people are always caution when it comes to spending their hard earned money. Thinking about buying Ukraine real estate either for investment purposes or just as a place to live, you shouldn't make your decision following some one's opinion or your own emotions only. Study up the market to get a general idea first. Let's look at the big picture.
The two major rules of real estate are:
Can you really "buy low" in Ukraine? As an example, let's consider Prices for residential real estate presented (January, 2007) by the independent Ukraine real estate specialist Sergey Kalinin.
| Rank | City | Price/sq.m, USD | Population, thousands |
|---|---|---|---|
| 1 | Kiev | 2 600 | 2 108 |
| 2 | Odessa | 1 820 | 1 020 |
| 3 | Dnepropetrovsk | 1 340 | 1 043 |
| 4 | Sevastopol | 1 275 | 379 |
| 5 | Kharkov | 1 170 | 1 463 |
| 6 | Simferopol | 1 120 | 371 |
| 7-10 | Lvov | 1 100 | 735 |
| 7-10 | Nikolaev | 1 100 | 508 |
| 7-10 | Uzhgorod | 1 100 | 117 |
| 7-10 | Chernovtsy | 1 100 | 243 |
| 11 | Khmelnitsky | 1 050 | 257 |
| 12 | Vinnitsa | 1 000 | 382 |
| 13 | Ternopol | 995 | 220 |
| 14 | Rovno | 925 | 248 |
| 15 | Zhitomir | 910 | 276 |
| 16 | Zaporizhye | 900 | 795 |
| 17-18 | Ivano-Frankovsk | 870 | 221 |
| 17-18 | Lutsk | 870 | 205 |
| 19 | Donetsk | 865 | 994 |
| 20 | Chernigov | 840 | 300 |
| 21 | Poltava | 820 | 309 |
| 22 | Cherkassy | 820 | 292 |
| 23 | Lugansk | 800 | 450 |
| 24 | Sumy | 760 | 280 |
| 25 | Kherson | 750 | 316 |
| 26 | Kirovograd | 645 | 246 |
Relatively low to compare to West-European countries prices per Square Meter of residential property looked very attractive for investors. But at the same time highly dynamic rise of Ukraine real estate prices during the last few years made Ukrainian market one of the most lucrative and desirable places in Europe for investors.
According to Kiev real estate company Blagovest , an average rise in price of Kiev flats, amounted to 51 % in 2006, 44 % in 2007, and 17.6 % in 2006. What are the causes of Ukraine real estate boom and such high yearly rise real estate prices?
Independent Ukraine is a young country. As any new born and growing system it has powerful "natural engines" to make it grow. In Soviet times all people were artificially kept "equal" to each other. Not much could be done legally to increase your income level. Nowadays most of those restrictions have gone and people have possibility to earn money. Ukraine real estate is one of the best ways for doing this.
Here are the major reasons of the rapid rise in price of real-estate in Ukraine:
Ukraine real estate is going through many challenges (May, 2009). According to Colliers International "Real Estate Review" (2009, Ukraine) one shouldn't expect full recovery of investing transactions until Ukraine's economy demonstrates clear signs of recovery. Nevertheless, foreign investor's interest to Ukrainian market will remain strong.
This year (2009) may be a good time to reconsider an existing real estate strategy and look for a good opportunity to find reasonable priced properties that will become valuable income generators over the coming years.
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