Bureau of technical supervision

Primary construction in Kiev, expert opinion

Average cost of 1 sq m of housing in the primary real estate market in Kiev in the national currency in January-June 2015, depending on the segment rose by 12.9-33% compared with the end of last year – up to yield 18.76-51,13 thousand USD, whereas the price decline in April-June-2015 7.7 15.1 per cent.

Such data contains in published on Friday by the review of the capital market Rosnedvizhimost consulting company City Development Solutions (CDS, Kiev).

“Poorly predictable market and full dollarization of the primary housing market, forcing developers to put in hryvnia price high exchange rate risks. From soznatelnoi of currency fluctuations that occurred in winter-spring of 2015, the main corrective tool for pictures was the discount, and the discount amount has reached previously unprecedented for the market 40%”, – quoted in the message of the CDS Director Yaroslav Chapko.

According to CDS, in January-June-2015 average cost of 1 sq. m of habitation of economy class on the primary real estate market of the capital increased by 33% to 18,755 thousand UAH, “comfort” – by 15.9%, to 22,239 thousand UAH, “business” – by 24.9%, to 32,599 thousand UAH, and the premium of 12.9% to 51,131 thousand UAH.

However in the second quarter of the current year decrease in the average cost of 1 sq. m “primary” in Kiev in these segments were, respectively, 7.7 percent, to 8.7%, 10.6% and 15.1 per cent, specified in the message.

In turn, senior consultant Victoria CDS of Redeem said that the first half of this year, despite the rather pessimistic expectations of participants of the capital market primary Rosnedvizhimost calm.

“The market shows a good activity which is achieved by stimulating discount policy developers, and the release of new interesting objects,” she added.

Among the trends of the first half of the current year in the capital market the primary residential real estate experts note, in particular, preserved a high proportion of investment transactions in the total volume of transactions in housing sales due to the lack of population alternative instruments of saving.

In addition, among such trends high market dependence on the fluctuations of the exchange rate, which reduces the attractiveness and efficiency of installments and promotes an increase in the number of transactions with 100% payment, as well as significant price fluctuations in some periods up to 46% – in all segments of the primary market of residential real estate of Kiev, specified in the message. Technical supervision in construction of such facilities is carried out according to the new requirements and technologically more advanced.

According to CDS, in January-June of 2015 because of high competition Metropolitan residential complexes (LCD) economy relative to LCD comfort class has developed a two-fold difference in the rate of growth of prices in such LCD: the increase of the cost in the comfort class was 15.9% and in economy class – 33%, with the gap of prices between these segments by the end of June-2015 decreased to 18% from 36% at the end of 2014.

In CDS note that in the second half of 2015 the price situation and the level of investment demand in the primary market Rosnedvizhimost Kiev will continue to determine the exchange rate, as the market remains “dollarsurveys” and 99% of developers set the hryvnia rates based on the U.S. dollar.

“Mass building Central areas, including caves, as prestigious accommodations, and also budget projects, will strengthen the already fierce competition between developers, primarily price, which will undoubtedly be reflected in a decline of average prices in the area and in the segments as a whole,” predicting the company.