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Ukraine’s housing market woes continue

House prices in Kiev were down 5.01% during 2022

Secondary market apartment prices in Kiev fell by 5.01% (inflation-adjusted) during 2022 with an average price of US$ 1,116 per square metre (sq. m.), following a y-o-y contraction of 3.09% in 2021. On a quarterly basis, real house prices were more or less steady.

Gloomy outlook

Ukrainian house prices are expected to continue falling in the medium term, amidst the ongoing Russia-Ukraine crisis. The war resulted to Europe’s fastest-growing refugee crisis since World War II, with more than 6.7 million Ukrainians fleeing the country and a third of the population displaced.

Ukraine’s house prices have been generally falling in the past nine years, particularly in 2014 because of hryvnia devaluation due to the Russian war. Currently, house prices are about 77% (inflation-adjusted) below their Q3 2008 peak of US $3,627 per sq. m, according to S&V Development.

Rents, rental yields: moderate yields in Kiev at 5.44%

Ukraine: city centre apartment buying price, monthly rent (2-BR apartments)
Buying price Rate per month Yield
Kiev $61,029 - $281,670 $203 - $1,033 4% - 6.5%
Recent news. Ukraine’s economy contracted by a whopping 31.4% year-on-year in Q4 2022, following declines of 30.8% in Q3, 37.2% in Q2 and 15.1% in Q1. The Ministry of Economy estimated an overall drop in GDP in 2022 of 30.4%. Outlook has been very pessimistic, after Russia launched a military operation in Ukraine. Critical export routes via the country’s Black Sea ports in Odessa and Mariupol have been interrupted. Odessa is under blockade by Russian naval forces while Mariupol has been devastated by Russian bombardment.

While there had been tensions between the two countries for a long time, the situation started to get out of control last year when Ukrainian President Volodymyr Zelensky urged the U.S. to let Ukraine join North Atlantic Treaty Organization (NATO). A NATO membership will guarantee Ukraine that the alliance will defend it against Russia and other adversaries. Yet this is not the first time that Russia-Ukraine tensions have reached a boiling point. In 2014, Russia invaded and subsequently annexed Crimea from Ukraine.

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