Experts predict a sharp decline in prices in the Ukrainian real estate market

No matter how restrained experts in the housing market are in their forecasts, the conclusion is clear – the real estate market is in danger! Of course, no one claims that apartments will become unnecessary to Ukrainian citizens starting next month. But they may become unnecessary at current prices, which are obviously unaffordable for many.

What threatens the 'immovable' market

The main threats are obvious. The sharply increased currency value, which has dragged prices up even for domestic goods, has severely reduced the purchasing power of the population. Corresponding wage indexing is not anticipated for now. There are no long-term credit offers on the market with acceptable interest rates either. The reason is the crisis in the Ukrainian banking system and the unpredictability of potential financial risks. The unstable situation in the eastern regions plays a crucial role. In several areas of Ukraine, citizens are afraid to make long-term investments in real estate for quite understandable reasons. The demand for square meters in Kyiv is supported by Kyiv residents and displaced persons from Donetsk and Luhansk regions.

Main contradictions in the real estate market

Perhaps the situation in the real estate trade would not be so discouraging if it weren't for the accumulated contradictions. Strangely enough, in a country with the poorest population in Europe, the cost of residential square meter exceeds this figure in many European cities. And yet, the income level of the majority of the population there is significantly higher. The rise in prices for Ukrainian real estate coincided with the beginning of mass mortgage lending. Citizens, poorly acquainted with this market, recklessly took out loans for several decades and 'invested' them in shamelessly overpriced housing. They were not deterred by high interest rates or the fact that the amounts due far exceeded their earnings for all the coming years. Meanwhile, crafty realtors took advantage of the situation and shamelessly inflated prices. Today, this imbalance is already obvious to many.

What holds back the inevitable decline

The trouble is that a sharp decline in real estate prices is disadvantageous (rather, deadly dangerous) for major market players. Developers simply will not be able to recover their invested funds, as the cost of building materials has kept pace with the rising square meter prices. Devalued apartments as collateral for banks could lead them to bankruptcy. Major realtors, who elegantly earned their percentage from sales deals, also do not want to lose profits. As a result, we see cautious predictions in the media that it may be somewhat, but not soon... Although the imminent collapse of the Ukrainian real estate market is evident.

When will the 'Hour X' come

Perhaps tomorrow! Although influential players in the real estate market will strive to delay this moment, using their own reserves and the traditional inertia and unwieldiness of this economic sector. From the outside, this resembles a large white liner that, having received a hole, still maintains its course. Apparently, the situation will clarify by the end of the current year, and if new 'icebergs' appear, then even earlier.

Based on materials from http://rieltor.ua