Overview of the residential real estate market of economy class in Kiev

It is customary to refer to the real estate of the most affordable and mass category, that is, to economy-class housing, apartments and houses in Kiev, the cost of which, regardless of the total area, does not exceed 100 thousand dollars.

Overview of the residential real estate market of economy class in Kiev
Alexander Lirner. Kiev reminiscences. 2000

Or apartments, the cost of one square meter in which is in the price range from 7.5 to 12 thousand hryvnia (from 930 to 1.5 thousand dollars). Developers and realtors insist on such an appraisal of economy-class real estate in Kiev..

If in 2003-2004, which accounts for the construction boom in Ukraine, construction companies relied mainly on the construction of business class and premium class apartment buildings, which were in high demand at that time. Affordable housing in the pre-crisis years was presented mostly on the secondary real estate market in Kiev. After the crisis of 2008, when the demand for business-class apartments decreased in the capital of Ukraine by more than 30%, and the demand for affordable apartments decreased slightly, developers began to massively erect new economy-class buildings.

The results of the first quarter of 2011 also clearly showed that the bulk of potential real estate buyers – 90%, are interested in inexpensive apartments, ranging from 33 to 40 square meters, presented in the primary and secondary markets.

Of course, the cost of housing to a large extent depends not only on which category the newly built apartment building belongs to, but also on the location of the apartment. So, traditionally, the most expensive housing in Kiev is located in the central districts – Pechersky and Shevchenkovsky, while the cheapest apartments are presented on the real estate market of Darnitsky and Desnyansky districts.

For comparison, if the average cost of 1 square meter of economy class housing in the Shnevchenskiy district is $ 2.2 thousand, then in the Desnyanskiy district the price of 1 square meter of a square apartment of the same class was set at the level of $ 1,000, and in the Darnitskiy district – 1.2 thousands of dollars. The purchase of an apartment in the Svyatoshinsky district of Kiev will not cost much more – the average cost of 1 square meter of economy-class housing here is 1.4 thousand dollars. By the way, it is Svyatoshinsky district that is currently the leader in the number of residential complexes under construction with affordable apartments worth up to $ 75 thousand..

You can save on buying an apartment by purchasing housing in a house that has not yet been commissioned.

The cost of housing is also greatly influenced not by the district of Kiev itself, but by the presence of a convenient transport interchange, in particular, the proximity to the metro station. The remoteness from the metro can reduce the cost of housing by 10%. You can also save on buying an apartment by purchasing housing in a house that has not yet been put into operation; according to developers, economy class housing in a new building under construction will be cheaper than buying an apartment on the secondary market, and at the time the house is put into operation, housing rises to price on average by 5-10%

Economy class apartments in Kiev
Vitaly Petrovsky. 1999

The price of an apartment also depends on the floor – housing on the first and last levels traditionally costs 10% less than apartments on other floors, this trend is also relevant for the secondary real estate market. Although recently the last floors of new buildings have begun to be in great demand – potential buyers have become less afraid of an elevator breakdown, roof leakage and lack of water than the last floors of old buildings usually sin, and the advantages of such “high-rise” housing include remoteness from street noise and lack of neighbors stomping overhead.

According to the rating compiled by realtors, the cheapest apartments for sale in May 2011 on the secondary real estate market in Kiev cost $ 30,000 each. The first of them is a “gostinka” with an area of ​​only 19 square meters, located on Nikolsko-Slobodskoy Street in the Dnieper region, and the second is a one-room apartment with an area of ​​21 square meters – on O. Teligi Street.

The most profitable and affordable among the two-room offers of the primary market in May 2011 were apartments in a new building on Poznyaki, the cost of which was set at $ 61.3 thousand, as well as on Tampere Street, worth $ 52 thousand each.

At the same time, it is almost impossible to find a private house within the boundaries of Kiev, the cost of which would be below 100 thousand dollars, that is, it could compete with the price of economy-class apartments. Although there are still areas with private buildings in the Ukrainian capital, the cost of non-dilapidated buildings is on average $ 150,000, and the upper limit can reach $ 7 million.

Of course, you can find, for example, in the Svyatoshinsky district, on the Resurrection and Rusanovsky gardens, ordinary rural houses with amenities and water in the yard, the price of which will be from 70 to 100 thousand dollars, however, such buildings are often simply demolished, that is, the owner is actually pays the cost of a land plot on which new housing will grow in the future.

Development trends and forecasts for the future

After the crisis of 2008, analysts are afraid to make long-term forecasts regarding the development of the real estate market, including the economy class. However, analysts agree on one thing – in the near future – until the end of 2011 – no sharp jumps in the economy-class real estate market in Kiev are expected.

According to the latest data, during June this year, the cost of 1 square meter of economy-class housing increased on average in the capital of Ukraine by only $ 2. Including in Shenchenkovsky district – by 0, 09%, in Pechersky and Darnitsky districts – by 0.07%, in Desnyanskiy – by 0.14%. Thus, we can talk about an increase in cost actually by the inflation rate.

Overview of the residential real estate market of economy class in Kiev
Pavel Vitanovsky. Embankment. 2005

Experts also do not predict a drop in the cost of affordable housing, since the demand for economy-class apartments is quite stable, and in the fall of 2011 experts expect a traditional seasonal revival of the market.

For example, in the residential complex “Southern Gate, which is located in the Osokorki microdistrict in the Darnytskyi district of Kiev and offers standard apartments with an area of ​​33-40 square meters at a price of $ 1.3 thousand per meter, more than 80% of apartments have already been sold, despite the fact that that the complex has not yet been put into operation.

There are also no prerequisites for a significant increase in the cost of housing in Kiev – today there are more than enough economy-class offers to meet demand, only in 2011 the construction of 12 residential complexes in different districts of the capital will be completed. In addition, even the cost of housing in the most affordable category significantly exceeds the average salary in Kiev. Thus, the average salary in the capital at the beginning of 2011 was fixed at 3.5 thousand hryvnia (about $ 450), so that even buying a small economy-class apartment turns into an unattainable goal for most families. That is why in the past year, more than half of all transactions in the economy class real estate market were purchases of apartments on a mortgage loan..

Prime Minister of Ukraine Mykola Azarov and Deputy Prime Minister of the Republic for Economic Affairs Serhiy Tigipko previously announced amendments to the Law “On Urban Development”, which should significantly simplify the procedure for obtaining a permit for the construction of economy-class residential complexes. The Ukrainian authorities intend in this way to reduce the cost per square meter of living space by almost a third, according to Azarov, the price of 1 square meter in Kiev may drop to $ 500-800. However, so far only the development of changes in legislation is underway and the prospects for the adoption of amendments are currently vague. Many experts believe that a significant reduction in the cost of housing, even after simplifying the procedure for obtaining construction permits, cannot be expected.

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