In 2022, the price of land in Ukraine increased by 30%, and by 2024 the price may jump by another 70%. Forbes.ua writes about this with reference to experts who note the increase in the number of transactions.
Thus, according to Serhii Kuleshov, head of the Association of Landowners of Ukraine, since the opening of the land market in July 2021, land in Ukraine has never been bought as actively as it is now.
"Before the war, we had two advertisements for the sale of land and one for the purchase, and now there are six buyers for one application for sale," Kuleshov said.
The growth in demand for land plots is confirmed by the data of the Ministry of Agrarian Policy. According to the department's statistics, 153,659 purchase and sale agreements have been concluded since the launch of the land market until March 2023 (the total area of land in the agreements is 344,061 hectares). At the same time, more than a third of the deals were concluded after the start of the full-scale war, although until February-June 2022, the market was paralyzed due to the closing of the registers.
Analysts say the main reason for the revival is the expectation of a rise in land prices after legal entities can join the land market. Land appraiser Kateryna Tulku estimated that the price of land increased by 30% in 2022 only, and by 2024 it may jump in price by another 70%.
In addition, as Kuleshov explained, land partially replaced apartments for investors.
"The real estate can be destroyed, the stakes are threatened only by mining, but this is not so critical," the specialist noted.
At the same time, an investment in land can bring 10-15% of the annual rent in foreign currency.
However, HarvEast director general Dmytro Kushnir is confident that forecasts of a boom in the land market in Ukraine are premature. During the hot phase of the war, investors will always keep in mind the risks of occupying territories or shelling, the businessman believes. The condition for real activation of the market is the same as for other sectors of the economy - the "Marshall Plan" and economic reforms.
Before the start of the full-scale invasion of the Russian Federation into Ukraine, land was most actively sold in the Kharkiv, Dnipropetrovsk, and Poltava Regions. These regions retained the leadership in terms of the total area of land sold, however, due to military operations, demand shifted to other regions.
Now investors take into account the distance from the border with the Russian Federation and Belarus, as well as the proximity to the zone of active hostilities. As the general director of IMC Alex Lissitsa said, right-bank Ukraine, especially the Vinnytsia and Khmelnytskyi Regions, have now become the leaders. The first place was held by the Poltava Region.
The lowest demand has areas 10-15 km from the state border in the Kharkiv, Sumy, Kherson and Chernihiv Regions. However, there are more offers, and the prices are low, so there are buyers.
"Despite the big risks, plots at a price of USD 600-800 find their buyer," KupiPai head Volodymyr Radko noted.
The average land price in Ukraine in the first quarter of 2023, according to KupiPai, was UAH 54,500 or about USD 1,400 per hectare. However, the cost of plots varies significantly depending on the region. For example, in the Poltava Region, where the demand is the highest, a hectare is sold for an average of USD 2,000, although a year ago the price was by USD 300-500 lower.
The estimates of the Ministry of Agrarian Policy are not so optimistic. The authority notes that in February, a hectare of land in Ukraine costs an average of UAH 39,000 or about USD 980. Radko calls such numbers underestimated.
"A large number of deals are concluded based on the regulatory monetary valuation of the land. This way you can reduce the amount of taxes and spend the rest of the deal in cash," the expert explains.
According to his calculations, the market price is usually 2-2.5 times higher than the regulatory estimate.
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