Ukrainians not ready to invest in real estate because of war – National Bank

The National Bank of Ukraine (NBU) reports that now the price conditions on the real estate market in Ukraine are more favorable than before the full-scale invasion, however, due to the military risks, Ukrainians are not ready to actively invest in the purchase of housing.

This conclusion was reached by the National Bank specialists during the preparation of the December Financial Stability Report, Ukrainian News Agency reports.

The improvement in price conditions on the real estate market is evidenced by:

firstly, the decrease to its long-term average “price to rent”, so buying housing becomes more profitable compared to renting it;

secondly, the historically minimum values ​​of the “price to income” indicator - on average, the purchase of 70 sq. m of housing in Kyiv for a family will cost the equivalent of its 10-year income.

However, the demand for housing has not yet recovered to the level before the full-scale invasion, although it is slowly recovering.

Facts about the real estate market:

- the cost of a square meter on the secondary market in dollar terms in the capital and western Ukraine has mostly remained stable, and in other regions it is even decreasing;

- market conditions are determined by the buyer: the actual sale price of apartments is still a quarter lower than the average advertised prices;

- the cost of housing on the primary market is growing, primarily in the western regions, while the construction of new housing is proceeding rather slowly due to the lack of resources, in particular the labor force;

- given the slow replenishment of supply due to new construction, the risks of a shortage of new quality housing in the future remain;

- the share of mortgage transactions in the second half of 2024 decreased to 4% compared to 5% in the first, which is comparable to the indicators of 2021. Almost half of all loans since the beginning of the year were issued by banks for properties in Kyiv and the Kyiv Region.

The decrease in the role of mortgages is explained by the slowdown of the currently key program for real estate buyers, eOselia, due to a change in its design and limited resources.

Because of this, the importance of the program for the real estate market is unlikely to increase in the near future, so the development of more mass products from banks is needed to stimulate the market.

As Ukrainian News Agency earlier reported, after the Russian cyberattack on state registers, real estate transactions still remain blocked.

Recall that on December 19, a large-scale failure of state registers occurred in Ukraine. The work of all state registers accountable to the Ministry of Justice was suspended. Vice Prime Minister Olha Stefanishyna stated that the data leak is not confirmed, and it will take at least 2 weeks to restore it.

The Security Service of Ukraine has opened criminal proceedings over the cyberattack - one of the versions is that russian special services are behind this cyberattack. At the same time, the SSU could not claim that the data leak was avoided.

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