Real estate market analysts is urging Ukrainians to be careful.
Despite the difficult economic situation in the country, in the capital, new housing construction is gaining momentum. But experts advise to be cautious with investments in real estate and frighten another “bubble”.
The solution of the phenomenon
One gets the impression that the crisis developers uneasy. A lot of Kiev billboards advertise new buildings in different districts and the suburbs. What is the solution of the phenomenon? We can assume a few basic explanations.
First, beginning in Ukraine in 2014, the banking crisis, still far from complete. Banks continue to liquidate, so the Ukrainians do not hurry to entrust their savings to financial institutions. Few creditworthy citizens believe that real estate is in the current circumstances, the most reliable refuge for the available funds.
Second, many construction firms, in fact, are pyramid – to complete the previous house, they begin to collect money for the construction of the next, and so on. Therefore, in Kiev, despite the crisis, new construction. In the capital in 2016 were put around 1.3 million square meters of housing (and this year, according to forecasts almost twice as much) is 20.3 per thousand (a record since the beginning of 2000-x). But only 5.2 million of them were sold, i.e. more than 15 thousand apartments stand. Nevertheless, developers are in no hurry to drop prices and have sales like “buy an apartment – Parking is a gift.”
“The housing market continues to grow offer, but demand is limited and important factors to increase it in the short term, no. This creates excess supply, which gradually accumulates. Lending volumes are too small to stimulate demand and to influence prices”, – stated in the report of the national Bank.
Then all parties are looking for its benefits. The builders cannot reduce prices to costs, as you won’t be able to finish the started. Bankers worried about that “irresponsible” citizens carry their savings is not to them but to developers. Ukrainians are waiting for either lower prices or their incomes rise. But, apparently, will have to wait a long time.
Thirdly, a few years ago, during a stable economy with corresponding salaries, the domestic construction companies have begun to design homes with increased square footage of apartments is hoped that the Ukrainians would demand. But three years ago, the situation has changed dramatically, and the large square footage apartments are simply not in demand. Today’s real buyers money is only enough cheap small-sized housing. And since reschedule homes built under current realities is impossible, a lot of ready apartments are idle waiting for their owners.
Construction race
Meanwhile this construction the race has gained such a pace that slowing down is difficult. On the website of almost any developer you can find apartments for every taste – from the dormitory economy class to luxury penthouses, which are not sold for exorbitant prices.
In addition, there is another important point: the population of Ukraine is gradually decreasing. And, as naturally, and as a result of significant migration. And if in the first years of independence, it was believed that us 52 million, now even the state statistics service says about 42 million people.
“Warning for potential investors, – wrote on his page on the social network the President of the NGO “League of experts of Ukraine” Svetlana Bovsunovskaya. In 2018 in the primary market of real estate may be the same situation as in 2008. The market formed a bubble that would have burst if not today, then tomorrow. What to do to investors if the construction of their houses will stop? I advise you to think about the mechanisms of protection of property rights to their apartments today, yet customers and developers are in their places and not scattered all over the world…”
What are the real possibilities to protect their investments in construction? The lawyers say that they are almost there.
“Refund of money takes place solely through the courts, says lawyer Andrew Wigierski. – You can see the conditions, provided that in the event of failure of an investor on the deal, but in this case will inevitably be faced with penalties. Though in fact in the end it will be possible to obtain larger amount than in the case when the building is already frozen and the developer is no resource for redress and compensation”.
Experts remind that the panic is a bad helper in any case. So those who have already signed a contract and paid for the deal, it is best to calmly wait for the completion of construction. The rest should think twice and carefully consider the information about the Builder before you invest in new housing.
Buyers want to protect
Meanwhile, the deputies proposed to protect investors new to VR introduced a bill No. 7128 “On amendments to some legislative acts of Ukraine in order to protect the property rights of persons who have purchased apartments and non-residential premises in buildings under construction.”
In the explanatory note to the document States: today, because of gaps in the law requirements for apartments and non-residential investment agreements between developers and buyers are not subject to state registration. In this regard, the investor is exposed to two main risks.
1.Holders of claims under the investment agreement completely protected from double sales of apartments, an unscrupulous developer.
2. Commissioning of residential facilities is often delayed due to detected violations and inaccurate information about the project.
Lawyers agree: with the adoption of such a law the rights of investors will actually be better protected.
Now, even paying the full cost of an apartment in a newly built house, the investor receives no property rights to it, explains Andrew Wigierski. – Bill No. 7128 introduces the concept of property rights on the construction object. Moreover, this right is not only enshrined in the Treaty, but subject to mandatory registration in the state register. Thus, the law will protect the buyer from re-sale of his apartment an unscrupulous developer, and, besides, he will be entitled to a specific apartment, and not on “air”.
What will happen to prices
While potential buyers are clearly waiting, hoping that housing will be cheaper, experts say that to reduce the price of the most popular today housing economy-class developers have nowhere to go. Because the prices of construction materials continue to rise, wages by the builders also need to be indexed.
As for apartments of medium and higher price category, on them from time to time held shares discounts of 15-25% and gifts, but the positive effect is minimal.
However, the experts note the trend of recent years: despite the General decrease in population of the country, a growing number of residents of large cities. For example, Kiev in the coming years will be a quarter more – from the current 4 to 5 million people. And together with the suburbs – and at 7.5 million And that all these newly-Metropolitan residents to provide housing in the next 8 years would require about 300 thousand apartments.
Given all of these factors combined, experts say sharp price fluctuations in the property market should not be expected. But this does not mean that the cost of apartments will stop. Because of rising prices (including materials and labor) will gradually “grow” the most popular one-bedroom apartments of 50 square meters. But sellers of luxury homes will continue to lure customers with promotions and giveaways – there are opportunities to reduce prices.
Falling prices in the secondary market will continue for approximately 0.5% per month. Because in addition to worn communications age buildings have low energy efficiency. In these apartments it is impossible to install metering devices of heat, which causes the excessive and so prohibitively expensive heating.
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