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Market analyst Victoria Bereshchak shared with the editorial office of Novyny.LIVE in an exclusive commentary what buyers and sellers should prepare for 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 housing costs, 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 the policies of his White House. 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 cost of construction in 2023 increased by at least 45-47%. This refers to the rising cost of materials and construction and installation work. At the same time, we have practically zero demand for real estate. In certain segments, it is concentrated at up to 20%. And that is if a combination of factors occurs,” noted the expert.
This includes a good reputation of the developer who continues to build and fulfill their obligations, despite regular missile attacks, damage to energy infrastructure, etc. It also includes the product’s compliance with consumer expectations, which have begun to focus on:
- polyfunctional 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 will intensify the shortage of skilled workers.
I believe that 2025 will be decisive for developers. We will clearly see who has the potential to continue 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, 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 and sale activities will revive in the regions. Large hub cities, including Lviv and Kyiv, have more active markets. As practice showed in 2024, considering the dollar exchange rate and other factors, a price increase for liquid one-room apartments within 10-12% is possible, and for two- and three-room apartments, it will be around 6-8% per year.
As for the e-Oselia program, it can remain a driver if there is sufficient funding. Moreover, stable funding, without revising decisions on allocating funds. It is necessary that at least 17-20 billion hryvnias are allocated to e-Oselia annually,” added the analyst.
However, the purchasing power of Ukrainians should be considered. It has decreased because people are psychologically unwilling to invest large sums in square meters due to the uncertainty of geopolitical events around Ukraine. An optimistic scenario would be if it is possible to return at least 10-15% in the overall demand structure, i.e., in sales.
The expert is confident that developers will not be able to reconfigure their business processes to avoid depending solely on buyer’s money for continued construction. It is necessary to find investment partners interested in building residential properties. If companies do not start cooperating with international players who are observing the Ukrainian market, seeing its potential after victory, there will be a reformatting of developers’ activities in the worst sense.
Date: 30.12.2024 Source: Novyny.LIVE