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Residential real estate market of Kiev overview: 2016 year's results February 2017

1

RESIDENTIAL REAL ESTATE

MARKET OF KIEV OVERVIEW:

2016 year's results


2

262,3

266,1

271,9

273,1

273,5

276,6

279,2

287,9

297,3

413,8

416,5

419,4

420,3

424,4

427,2

431

436,6

442,8

290,9

293

296,6

297,3

300,6

303,3

305,3

309,3

312,4

1.010 1.020

1.034 1.038 1.047

1.057 1.066

1.085

1.112

940

960

980

1.000

1.020

1.040

1.060

1.080

1.100

1.120

0

50

100

150

200

250

300

350

400

450

2007 2008 2009 2010 2011 2012 2013 2014 2015

1 room - 1 2 rooms - 2

3 rooms - 3 Total apartments -

57,0

58,0

59,0 59,7

60,6

61,6 62,2

62,7

64,9

20,5 20,6

20,9 21 21

21,3 21,3

22,0 22,6

20

21

22

23

52

54

56

58

60

62

64

66

2007 2008 2009 2010 2011 2012 2013 2014 2015

mln m2

Total residential accommodations - , mln. m2

m2 for each citizen - 2

Cumulative residential accommodations in Kyiv city

Cumulative residential accommodations On the early 2016 according to the consolidated data of the Statistics

Department of Kyiv city counsil and State Statistic Service of Ukraine,

overall residential accommodations were 64,9 mill. sq.m. Therefore 22,6 sq.m. of residential accommodation is per capita ratio

for each permanent resident of the Capital.

Total residential accommodations of Kyiv city and calculated per each citizen, sq.m.

Number of apartments According to the consolidated data of the Main Department of

Statistics of Kyiv city at the beginning of 2016 in the Capital, there were

1,112,100 apartments. Total residential accommodations of the Capital is formed by: One-room apartments 297,3 thousand (26,7%); Two-room 442,8 thousand (39,8%); Three-room apartment 311,1 thousand (28,1%); Four and more rooms apartment - 49,9 thousand (4,5%).

Total number of apartments in Kyiv city

and by number of rooms, thousand pcs

Sources: UTG,

Statistics Department of Kyiv city council

Sources: UTG

State Statistic Service of Ukraine


3

138,1

341,0

851,0

1.5

14,7

306,3

726,5

1.1

37,5

1.7

27,0

309,7

675,8

1.0

66,5

1.8

63,8

361,9

637,6

1.1

76,9

2.0

51,0

179

,1

507

,4

943

,1

1.5

09

,0

182

,0

391

,3

603

,3

1.4

42

,4

215

,1

450

,1

753

,2

1.3

65,8

128

,7

293

,5

699

,6

1.3

34

,0 -46,3% -25,5%

21,5% 29,8%

121,8% 113,1%

33,7% 14,0%

1,1%

-7,0% -6,2%

7,9%

16,9% -5,7%

10,3% 10,0%

0,2% -7,9%

1,5% 0,4% 1,6% -22,9% -36,0%

-4,4%

18,2% 15,0%

24,8%

-5,3% -40,2% -34,8%

-7,1% -2,3%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

140%

0

200

400

600

800

1.000

1.200

1.400

1.600

1.800

1Q

2013

2Q

2013

3Q

2013

4Q

2013

1Q

2014

2Q

2014

3Q

2014

4Q

2014

1Q

2015

2Q

2015

3Q

2015

4Q

2015

1Q

2016

2Q

2016

3Q

2016

4Q

2016

x1000 2

. - Kiev Region, thousand m2 - Kiev , thousand m2

( ) - YoY growth (Region),% ( ) - YoY growth (Kiev),%

Volume of commissioned accommodations in Kyiv city and Kyiv region

Commissioned accommodations At the end of 2016 the volume of commissioned residential accommodations in

Kyiv city and Kyiv region totally was 3,384,954 sq.m. and was increased compared with 2015 by +4,8% in related or by +155 330 sq.m. in absolute value and hit a new record. The increase of cumulative offers was realized by the commissioned accommodations in Kyiv region (by +187 123 sq.m. or +10,0%) with a slight decrease of the volume of building construction in Kyiv (by -31 793 sq.m. or -2,3%).

The 2015 hits also a record - of the total volume of housing in new buildings in Kyiv and the Kyiv region, it hits 3.23 mln. sq.m. (in 2014 = 3,169,000 sq.m. in 2013 = 3,024,000 sq.m.) In the structure of the offer in 2015 the share of Kyiv city was 1.37 mln.sq.m.; Kyiv region – 1.86 miln.sq.m..

Volume of the commissioned accommodations in Kyiv city and Kyiv region in the dynamics 2012-2016 (quarterly), thousand. sq.m., %

Year Kyiv, sq.m. Kyiv region,

sq.m. Kyiv and Kyiv region, sq.m.

2011 1 501 453 1 050 020 2 551 473

2012 1 503 439 1 167 163 2 670 602

2013 1 509 049 1 514 683 3 023 732

2014 1 442 391 1 727 027 3 169 418

2015 1 365 796 1 863 828 3 229 624

2016 1 334 003 2 050 951 3 384 954

Volume of commissioned accommodations in Kyiv city and Kyiv region in 2012-2016, sq.m.

Sources: UTG,


Statistics Department of Kyiv Region


4

271 389

278 183

279 297

147

100

102

25

70 37

62

259

215

220

134 39

239

112

239

275 304

216

40

72 154

56

167 355

161 89

134

148

67

68 78 65

73

44

140 81 96

146

64

60

83 65 65

106 82

315

96 187 206

223 75 119

0

200

400

600

800

1.000

1.200

1.400

1.600

2011 2012 2013 2014 2015 2016

х1000 2

Shevchenkovskiy ( ) Solomianskiy ( ) Svyatoshinskiy ( ) Podolskiy ( j ) Pecherskiy ( ) Obolonskiy ( ) Holosiivskyi ( ee ) Dneprovskiy ( e ) Desnianskiy ( ) Darnytskiy ( )

Commissioned accommodations by the districts of Kyiv city The structure the commissioned accommodations in Kyiv city, in

retrospect, is traditionally characterized by a proportion of 35-40% for the left bank of Dnepr river and 60-65% for the right bank.

On 2012, the primary housing market showed a parity rate 49.7% to 50.3% for both of the banks of the river due to the high rates of construction in Darnytskiy and Dneprovskiy districts.

In the recent years we can see a tend to reduction of the offers on the left-bank of Kyiv in the total structure in the favor of the right bank due to the appearance here more affordable offers and the reduction of the price difference.

Structure of the commissioned accommodations in the administrative districts of Kyiv

In particular, by the results of 2013 the share of new buildings in

Darnitskiy, Desnianskiy and Dreprovskiy districts was reduced to 39.4% in 2014 - to 29.7% and by the results 2016 was 28.0%

In the structure of the commissioned accommodations in 2016

Solomenskiy (23.6%); Darnitskiy (22.3%); Holosiivskyi (16.2%); Podolsky (12.9%) and Shevchenkivskiy (8.9%) districts of the Capital are dominating.

The smallest amount of offers are typical for the next Kyiv districts: Obolonskiy (0.9%); Desnyanskiy (2.8%); Dniprovskiy (2.9%) and Svyatoshinskiy (4.5%).

68,0% 50,3% 60,6% 70,3%

64,7% 72,0%

32,0% 49,7% 39,4% 29,7% 35,3%

Right Bank

Left Bank

Structure of commissioned accommodations by the administrative districts of Kyiv city in the dynamics 2011-2016, thousand sq.m.

28,0%


5

At the same time, according to the results of 2015 compared to

2010 it was a redistribution of the structure of residential buildings by a hight to the reduction the share of 1-2 storey buildings (from 21.5% to 5.2%) in favor of the increase of 6-12 storey buildings (from 1,8 % to 17.7%).

The largest value in the structure occupies a category of buildings of 16 storey and higher, which dynamics is really not changed (71-79%).

Structure of the commissioned accommodations in Kyiv city by buildings stroyes, thousand, sq.m.

The structure of the offer in Kyiv city

The dynamics of the structure of the commissioned accommodations in Kyiv shows a reduction in the share of the private sector from 15.6% in 2011 to 5.2% in the first half of 2016 and a corresponding increase of the share of multi-storey apartment buildings - from 83,7% to 94,8%.

Structure of the commissioned accommodations in Kyiv city by types of buildings, thousand, sq.m.

Volume of the commissioned accommodations in Kyiv city by number of storeys

15,6% 22,8%

10,1% 7,1% 5,7% 5,2%

83,7% 77,1%

89,1% 92,5% 94,2% 94,8%

0,7% 0,0% 0,8% 0,4% 0,2%

2011 2012 2013 2014 2015 2Q 2016

Private houses ( ) Multi-storey housing ( ) Dormitories ( )

42 63 50 45 21 35 22

61 90

45 42 46 39

7

335

752

222

864

264

716

211

0

200

400

600

800

1.000

1.200

1 2013 2 2013 1 2014 2 2014 1 2015 2 2015 1 2016

x1

00

0

2

1-2 storey (1-2 ) 3-5 storey (3-5 ) 6-8 storey (6-8 )

9-12 storey (9-12 ) 13-15 storey (13-15 ) 16 and more (16 )

Sources: UTG,



6

1-room 35%

2-room 32%

3 -room 25%

4-room 5%

5 and more rooms

3%

1-room 53%

2-room 30%

3-room 16%

4-room 1% 5 and more

rooms 0%

Structure of commissioned accommodations in Kyiv city by area of the apartments and the number of rooms

Distribution by the number of rooms in Kyiv

Typical for Slavic people necessity of ownership of proper accommodation with respect to reduction consumer purchasing power causes change of the structure of the commissioned housing on the

market offer of the primary property. In particular, the overall structure is typical trend to reduction of total

area. Thus, since 2011, the average total area of apartments dropped

down from 92.9 sq.m. to 76.2 sq.m. in 2013 and to 64.7 sq.m. by the end of 2016.

Area reduction is due to the optimization of the offers: the increase of

the number of one-room apartments (from 35.3% in 2011 to 52.9% in

2016), a stable share of two-room (31.7% in 2011 and 29.4% in 2016) and the reduction of the offer of three-room (from 25.2 % in 2011 to 15.6% in 2016), and more room apartments.

Despite the decrease in the volume of the commissioned area, the

result of 2016 hit a new record for the number of commissioned apartments - 20 265.

Number of rooms / Year

2011 2012 2013 2014 2015 2016

Apartments, number

Average area, sq.m.

Apartments, number

Average area, sq.m.

Apartment, number

Average area, sq.m.

Apartment, number

Average area, sq.m.

Apartment, number

Average area, sq.m.

Apartment, number

Average area, sq.m.

1-room 5 486 50,7 6 266 51,5 8 600 47,8 8 732 47,2 9 322 47,1 10 728 45,7

2-room 4 918 80,1 5 629 75,7 5 955 74,9 5 596 73,7 6 157 72,9 5 949 72

3-room 3 913 114 4 033 103,5 3 580 104,4 4 048 104 3 061 100,9 3 155 97,1

4-room 717 184 494 170 743 167 447 191,8 282 149,3 253 140,4

5 and more rooms 500 386 543 360,3 213 467,6 190 417,1 120 333,6 83 363,6

Total: 15 534 92,9 16 965 85,2 19 091 76,2 19 048 74,5 19 091 68,6 20 265 64,7

Structure of commissioned apartments in Kyiv city by the number of rooms and the average area of the apartments in the dynamics 2011-2016, pc, sq.m.

Structure of the commissioned apartments in Kyiv city by the number of rooms,%

2011 2016

Sources: UTG,



7

The cost of housing construction in the regions of Ukraine

Ministry of Regional Development, Building and Housing Support by order № 283 from October 24, 2016 has approved and recommended for implementation annual forecast of average indirect cost of construction of

housing in the regions of Ukraine, as of October 01, 2016. The indicators do not include: the prise of the land; costs associated with additional technical and economic conditions of the regions. Forecast average annual indicators of indirect cost of housing construction in the regions of Ukraine

for 2014-2016 (including VAT), in UAH Sources: UTG,

The Ministry of Regional Development of Ukraine

Region

Price of 1 sq.m. of the total area of the building

2014 2015 2016 October

2016

Ukraine* 5 515 6 287 8 481 8 848

Vinnytsia region 5 289 6 057 8 219 8 584

Volyn region 5 284 6 048 8 206 8 563

Dnipropetrovsk region 5 332 6 102 8 278 8 637

Donetsk region 5 757 6 593 8 947 9 349

Zhytomyr region 4 776 5 472 7 444 7 796

Zakarpattia region 4 751 5 444 7 389 7 724

Zaporizhzhia region 5 301 6 077 8 221 8 623

Ivano-Frankivsk region 4 904 5 623 7 643 7 991

Kyiv region 5 400 6 194 8 538 8 898

Kirovohrad region 4 728 5 396 7 337 7 597

Luhansk region 5 261 6 025 8 186 8 539

Lviv region 5 381 6 178 8 394 8 817

Region

Price of 1 sq.m. of the total area of the building

2014 2015 2016 October

2016

Mykolaiv region 5 271 6 087 8 324 8 792

Odesa region 5 324 6 087 8 260 8 566

Poltava region 5 027 5 723 7 743 7 986

Rivne region 5 598 6 369 8 612 8 852

Sumy region 5 114 5 864 7 964 8 333

Ternopil region 5 120 5 869 7 977 8 334

Kharkiv region 5 724 6 566 8 926 9 338

Kherson region 4 996 5 720 7 772 8 102

Khmelnytskyi region 5 374 6 128 8 307 8 605

Cherkasy region 5 382 6 169 8 385 8 759

Chernivtsi region 5 048 5 788 7 867 8 226

Chernihiv region 5 167 5 992 8 212 8 758

Kyiv 6 419 7 350 9 986 10 409

The indicators taken into account for the cost of housing construction: general building construction works on on building in total; arranging in a housing building of engineering systems; installation engineering, electro-mechanical and other equipment; works for the improvement and construction of intra-site engineering nets; the costs of the design, project approval and construction arrangement; profit, taxes, fees and mandatory payments established by the legislation.


8

The offer price on primary market of the residential real estate in Kyiv

The offer price of apartments on the primary market The average price of 1 sq.m. on the primary real estate market of

nominated in UAH at early February 2017 is 23,275 UAH and during the year increased by +522 UAH (or +2.3%) due to exchange of the exchange rate of USD to UAH, and the nominated the price in US dollars was $911 for 1 sq.m. and drop down for the year - $ 42, in absolute terms (or -4.4% in relative terms).

Offer prices in new buildings in the districts of Kyiv city

On January, 2017 UAH for 1sq.m. (1 USD = 27 UAH)

The offer price of the primary market for classes Due to the devaluation of the national currency and the periodic

fluctuations developers in the Capital refused to bind the future value of the hryvnia (UAH), and modified the conditions of payment by installments, making it a percentage or increasing the price of 1sq.m., depending on the size of the first payment, but are ready to consider an individual and offer seasonal discounts, what stimulate full payment of the price of an apartment at their own expenses.

In terms of class on the primary market the average prices at the early 2017 are as follows: in the class «Econom» = 16,596 UAH (or $ 649) for 1sq.m., in class «Comfort» = 27,885 UAH (or $1,091) for 1sq.m., in class «Business» = 43,986 UAH (or $1,721) for 1 sq.m.

The average price offers of apartments by classes on the primary

market in the years of 2011-2016, UAH for 1 sq.m.

1 2 "Э "

1 2 " "

1 2 "

"Э ", %

" ", %

", %

Sources:

UTG,

Portal www.lun.ua

1 2015 1 2016 1 2 "Э " 1 2 " " 1 2 " "Э ", %

" ", % ", %

9.8

55

9.8

24

9.9

86

9.8

29

11.3

98

16.8

73

16.5

96

14.0

59

15.2

10

15.4

18

15.2

28

19.5

23

26.5

82

27.8

85

21.6

57

21.2

03

21.1

33

22.0

74

28.1

28

38.6

39

43.9

86

$1.238 $1.230 $1.249 $1.230

$723 $706 $649

$1.766 $1.904 $1.929 $1.906

$1.238 $1.113 $1.091

$2.720 $2.654 $2.644 $2.763

$1.784 $1.618

$1.721

$0

$500

$1.000

$1.500

$2.000

$2.500

$3.000

0 UAH

5.000 UAH

10.000 UAH

15.000 UAH

20.000 UAH

25.000 UAH

30.000 UAH

35.000 UAH

40.000 UAH

45.000 UAH

2010 2011 2012 2013 2014 2015 2016

1 2 in "Econom" class, UAH 1 2 in "Comfort" class, UAH

1 2 in "Business" class, UAH 1 2 in "Econom" class, $

1 2 in "Comfort" class, $ 1 2 in "Business" class, $

http://www.lun.ua/


9

Offer price of apartments by districts

The most expensive districts traditionally are Pecherskiy ($2,089 or

58,071 UAH) and Shevchenkovskiy ($1,743 or 44,580 UAH), which are

characterized, in addition, by the slowest lowering of prices (-7.9% and

-8.8% respectively for the year ).

The cheapest districts of the Capital are: Desnyanskiy (-10.9% to $869);

Svyatoshinskiy (-12.7% to $1007); Dniprovskiy (-12.4% to $1043) and

Darnytskiy (-11.0% to $1045).

Offer price of apartments on the secondary market

of Kyiv districts, in USD for 1sq.m

.

Offer price on the secondary market The dominant currency on the secondary real estate market in Ukraine

is US dollar and the offer is nominated / linked to this currency. During the period of devaluation of the UAH (early 2014 and the whole 2015) the price of housing has increased dramatically.

On early 2017, in spite of the annual decrease of the average price of 1 sq.m. on the secondary market nominated in USD by -11.8% (or in absolute terms by - $175) up to $1,308, due to changes of the exchange rate of USD to UAH, the average price relative January, 2016 remained really unchanged and amounted to 35,566 USD in the local currency (drop by -27 UAH per 1 sq.m. (or -0.1%).

Offer price on the secondary market

for Kyiv in dynamics, USD, UAH for 1sq.m. (1USD = 27 UAH)

Offer price on the secondary market of the residential real estate in Kyiv city

15.3

21 U

AH

15.7

32 U

AH

15.2

25 U

AH

21.7

86 U

AH

27.9

44 U

AH

33.9

78 U

AH

35.5

93 U

AH

34.7

80 U

AH

35.5

66 U

AH

$1.918 $1.969

$1.906 $1.851

$1.772

$1.618

$1.483 $1.394

$1.308

$0

$500

$1.000

$1.500

$2.000

$2.500

0 UAH

5.000 UAH

10.000 UAH

15.000 UAH

20.000 UAH

25.000 UAH

30.000 UAH

35.000 UAH

40.000 UAH

2012 1H 2013 2013 1H 2014 2014 1H 2015 2015 1H 2016 2016

Price of 1 m2 in UAH Price of 1 m2 in $

1.743$

1.456$

1.254$

1.441$

1.811$

2.586$

1.754$

1.436$

1.695$

2.076$

1.227$

1.045$

869$

1.043$

1.345$

2.089$

1.114$

1.007$

1.165$

1.604$

Holoseevskiy ( ee )

Darnytskiy ( )

Desnianskiy ( )

Dneprovskiy ( e )

Obolonskiy ( )

Pecherskiy ( )

Podolskiy ( j )

Svyatoshinskiy ( )

Solomianskiy ( )

Shevchenkovskiy ( )

2014

2015

2016


10

The level of provision with private rooms The number of rooms in the house/apartment, divided by the number of

people living in them is determine whether people live in cramped condition. Tightness in the housing conditions can have a negative impact on the physical and mental health, relationships with others and development of children. In addition, the cramped housing conditions are often accompanied by poor performance of water supply and sewerage systems.

By results of 2015 in Ukraine (Russia, Serbia and Macedonia) in the average has 0.9 room per resident, what is significantly less than the average for European Union countries (1.7 rooms per president).

Number of rooms per each resident in some countries of the world

2,5

2,3 2,3 2,2

2,1 2,1 2,1 2,0 2,0 2,0 2,0 2,0 2,0 2,0

1,9 1,9 1,9 1,8

1,7 1,7 1,7 1,6

1,5 1,5 1,5 1,5 1,4 1,4 1,4

1,3 1,3 1,2

1,1 1,1 1,1 1,1 1,1 1,1 1,1 1,0

0,9 0,9 0,9 0,9

0

1

2

3

28

Э

Sources:

State Statistical Service of Ukraine,

Statistical Services of EU and separste coutries,

UTG

The average number of rooms per each resident in some countries of the world, units

Near 17.2% of the population of EU-28 lives in overcrowded

apartments. The highest rates of overcrowding registered in Romania (51.6% or 1.0 room per person), Hungary (47.2% - 1.1 room per person), Poland (46.3% - 1.1 room), Bulgaria (44.5% - 1.1 bathroom) and Croatia (44.1% - 1.1 room).

Belgium (1.6% - 2.3 rooms per person), the Netherlands (2.5% - 1.9 rooms) and Cyprus (2.8% - 2.0 rooms) have the lowest rates of overcrowding.


11

5.427

2.470

18.612

13.664

4.280

2.438

8.009

2.617

18.959

12.240

4.781

4.375

8.713

4.862

9.828

7.964

3.329

4.825

2.438

16.664

4.284

4.648

5.745

2.411

4.865

6.318

2.896

24.832

12.289

5.740

2.855

10.713

3.427

29.094

17.555

5.764

4.041

11.404

6.360

14.728

8.496

4.255

5.135

3.484

21.751

6.323

5.103

6.934

3.050

5.510

(Vinnytsia)

(Volyn)

(Dnipropetrovsk)

(Donetsk)

(Zhytomyr)

(Transcarpathian)

(Zaporizhia)

- (Ivano-Frankivsk)

. (city Kiev)

(Kiev Region)

(Kirovohrad)

(Lugansk)

(Lviv)

(Nikolaev)

(Odessa)

(Poltava)

(Rivne)

(Sumi)

(Ternopil)

(Kharkiv)

(Kherson)

(Khmelnytsky)

(Cherkasy)

(Chernivtsi)

(Chernihiv)

2016

2015

2014

Demand

By the results of 2016, according to data of the Ministry of Justice in Ukraine

private and public notaries certified about 228,057 purchase and sale

contracts of apartments and individual houses, excluding the Crimea and

Sevastopol. Compared to 2015 (191,686 contracts), the number of transactions

in Ukraine increased by +19.0% or 36,371 numbers in absolute terms.

Positive dynamics is typical for all regions without exception. In relative

terms the leaders are: Luhansk region (+39,4% of +1,143) and Ternopil

region (+36,4% or +930).

The largest increase in absolute terms, showed: Kyiv city (by 6,138 or

+26,7%); Dnipropetrovsk region (by 4 208or +20,4%); Kyiv region (by 3 635

or +26,1%); Donetsk region (by 2,689 or +28,0%); (by 6,138 or +26,7%); Lviv

region (by 2,620 or +29,8%) and Odesa region (by 2,467 or +20,1%).

Quantity of purchase and sale contracts in Kyiv city and Kyiv region in 2007-2016

The number of signed purchase and sale contracts

in regions of Ukraine in 2014-2016

The number of purchase and sale contracts in the regions of Ukraine, Kyiv city and Kyiv region

Sources:UTG ,

The Ministry of Justice of Ukraine

19.5

20

20.8

76

18.5

78

18.8

67

23.2

67

21.9

87

27.0

97

18.9

59

22.9

56

29.0

94

14.7

25

11.2

60

8.7

54

8.3

64

10.3

81

12.7

51

14.9

51

12.2

40

13.9

20

17.5

55 6,9%

-11,0%

1,6%

23,3%

-5,5%

23,2%

-30,0%

21,1%

26,7%

-23,5% -22,3%

-4,5%

24,1% 22,8%

17,3%

-18,1%

13,7%

26,1%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

0

5.000

10.000

15.000

20.000

25.000

30.000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Kiev ( ), pcs Kiev Region ( .), pcs YoY growth (Region),% YoY growth (Kiev),%

Sources:UTG ,



12

The number of purchase and sale contracts in the regions of Ukraine, Kyiv city and Kyiv region

Number of purchase and sale contracts of the apartments and individual houses in regions of Ukraine in the dynamics in 2012-2016 (by half-years)

Sources:UTG ,


Region 1 half of 2012 2012 1 half of 2013 2013 1 half of 2014 2014 1 half of 2015 2015 1 half of 2016 2016

Vynnytsia region 2 473 6 538 2 680 7 803 2 106 5 427 2 326 5 672 2 607 6 318 Volyn region 1 145 2 969 1 371 3 827 992 2 470 985 2 497 1 215 2 896

Dnipropetrovsk region 9 101 24 103 10 961 28 647 7 848 18 612 7 717 20 624 10 455 24 832

Donetsk region 13 758 35 029 14 405 36 659 8 613 13 664 3 183 9 600 4 449 12 289 Zhytomyrr egion 2 043 5 643 2 448 7 016 1 694 4 280 1 821 4 904 2 289 5 740

Zakarpattia region 1 090 2 896 1 245 3 586 978 2 438 1 052 2 597 1 181 2 855

Zaporizhzhia region 4 698 11 535 4 598 12 374 3 599 8 009 3 496 9 462 4 578 10 713

Ivano-Frankivsk region 1 327 3 379 1 485 3 984 1 110 2 617 1 073 2 698 1 464 3 427

Kyiv city 8 896 21 987 10 634 27 097 7 696 18 959 7 984 22 956 9 272 29 094 Kyiv region 4 304 12 751 5 555 14 951 4 708 12 240 5 890 13 920 7 301 17 555

Kirovohrad region 2 081 5 906 2 466 7 090 1 821 4 781 1 964 5 053 2 343 5 764

Luhansk region 5 825 15 534 5 945 15 706 3 678 4 375 831 2 898 1 652 4 041 Lviv region 3 496 9 488 3 907 10 557 3 916 8 713 3 462 8 784 4 743 11 404

Mykolaiv region 2 753 7 022 2 627 7 324 2 105 4 862 1 858 5 416 2 467 6 360

Odesa region 3 929 12 704 5 407 14 929 4 117 9 828 4 366 12 261 6 051 14 728 Poltava region 3 476 9 110 3 932 10 118 3 382 7 964 3 394 7 919 3 451 8 496 Rivne region 1 371 3 915 1 545 4 597 1 361 3 329 1 381 3 578 1 809 4 255 Sumy region 2 491 6 681 2 586 6 800 2 001 4 825 1 924 4 557 2 050 5 135

Ternopil region 1 060 2 804 1 226 3 546 991 2 438 1 043 2 554 1 541 3 484

Kharkiv region 8 873 22 592 8 406 24 033 7 033 16 664 7 698 20 203 9 898 21 751

Kherson region 1 998 5 575 2 283 6 347 1 594 4 284 1 871 5 089 2 726 6 323 Khmelnytskyi region 2 391 6 144 2 487 6 568 1 967 4 648 2 035 4 682 2 153 5 103

Cherkasy region 2 768 7 557 2 839 7 994 2 362 5 745 2 664 6 190 2 955 6 934 Chernivtsi region 989 2 647 1 194 3 316 988 2 411 960 2 422 1 303 3 050

Chernihiv region 2 381 6 488 2 210 6 331 2 018 4 865 2 202 5 150 2 363 5 510

Ukraine* (without Crimea)

94 717 250 997 104 442 281 200 78 678 178 448 73 180 191 686 92 316 228 057


13

1.401,6

942,4

2.638,0

2.488,0

1.776,8

782,8

567,9

902,9

-32,8%

179,9%

-5,7%

-28,6%

-55,9%

-27,5%

59,0%

-100%

-50%

0%

50%

100%

150%

200%

0

500

1.000

1.500

2.000

2.500

3.000

2009 2010 2011 2012 2013 2014 2015 10.2016*

М . гр

Mortgage loans ( ), mln UAH

YoY growth ( ), %

Mortgage lending (loan)

Lending of households in Ukraine

Reduction of lending of householders, which has started after the

crisis on 2008 - 2009, was continued in 2014 - 2015.

Since 2009, banks were actually forbidden to lend in foreign

currency of individuals and this is why the currency household debt in

2016 has decreased in 7.3 times compared with the peak value in

September, 2008. One of the factors of the reduction for foreign currency

indebtedness of individuals were the processes of its restructuring.

During 2016 the NBU was carried out large-scale diagnostics for all the

years of independence for 60 largest capable of paying banks (98% of total

assets): in the structure of a portfolio of granted loans, 53% of them were

problematic.

The volume of granted new loans for individuals in UAH in the context

of the objectives in the dynamics, bln. UAH

On January, 2017, the lending remains subdued due to the continued

high credit risk, a high level of debt load of the real sector, a very low

level of protection of rights of creditors, low capability of paying of

borrowers, tight credit conditions, the existence of legal restrictions

and the regular appearance of new legislative initiatives.

Mortgage lending by the results of 10 months of 2016 slightly quickened

but in general the structure of demand, the acquisition of apartments with

the borrowing of funds, still, does not exceed 4-5%.

The volume of loans for individuals to purchase real estate in the

dynamics 2009-2016, mln. UAH

Mortgage loan

Longterm for current needs

Short term for current needs

Cards loans

Sources: UTG,

National Bank of Ukraine

Sources: UTG,

National Bank of Ukraine


14

Number of mortgage contracts in regions of Ukraine in 2007-2016 dynamics

Number of mortgage contracts in regions of Ukraine, Kyiv city and Kyiv region

Sources:UTG ,


Region 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Vinnytsia region 7 356 7 947 341 454 644 704 624 294 332 417

Volyn region 4 114 3 535 273 412 649 502 517 333 207 223

Dnipropetrovsk region 20 765 27 831 1 057 1 345 1 941 1 646 1 677 1 080 997 1561

Donetsk region 23 919 39 601 1 492 1 868 2 814 2 592 2 556 703 129 82

Zhytomyr region 7 399 7 388 408 393 657 503 457 214 303 215

Zakarpattia region 9 433 4 728 353 398 599 547 521 275 274 304

Zaporizhzhia region 11 651 11 556 778 1 032 1 562 1 312 947 541 516 485

Ivano-Frankivsk region 7 107 5 035 509 534 670 580 540 294 272 246

Kyiv region 7 497 20 876 348 702 1 144 999 828 500 387 521

City Kyiv 31 405 25 121 4 424 6 850 8 526 7 856 9 321 5 969 4452 5 304

Kirovohrad region 5 516 3 941 192 372 473 421 364 176 178 163

Luhansk region 9 316 7 184 506 844 1 472 1 124 947 159 18 8

Lviv region 11 336 7 325 1 116 1 433 1 981 1 729 1 445 938 747 799

Mykolaiv region 7 262 5 823 495 597 655 567 505 258 247 262

Odesa region 19 802 11 387 962 1 329 1 808 1 447 1 358 847 826 842

Poltava region 7 593 6 293 655 779 1 271 1 112 980 481 430 387

Rivne region 5 924 4 528 413 563 555 461 407 217 257 260

Sumy region 4 894 4 374 409 505 785 924 683 427 334 241

Ternopil region 3 916 3 446 195 279 520 408 410 195 164 178

Kharkiv region 18 068 14 667 1 835 2 224 3 372 3 034 2 463 1 604 1363 1 398

Kherson region 6 473 5 182 393 469 647 581 634 408 417 480

Khmelnytskyi region 8 617 6 939 374 605 985 729 600 327 203 200

Cherkasy region 7 382 5 324 429 594 682 584 409 231 241 176

Chernivtsi region 5 706 3 576 305 386 518 358 289 173 204 196

Chernihiv region 4 104 3 225 405 534 601 535 394 205 218 233

Total: 256 555 246 832 18 667 25 501 35 531 31 255 29 876 16 849 13 716 15 181


15

Trends and Forecasts

The unstable economic and political situation in Ukraine and the

fluctuations in the exchange rate of foreign currency lead to an increase

in the price of housing, reduce the purchasing power of the population,

forcing him to refuse of the expensive purchases, take a wait and see

attitude.

On the other hand, the devaluation of the national currency, inflation,

lack of effective alternative investment opportunities, lack of confidence

of the population to the banking system makes investing in real estate

demand tool for the conservation savings.

As a result, the residential real estate market in Kyiv city and Kyiv

region annually has the absolute record in terms of commissioned

accommodations: 2,671 mil. sq.m. (in 2012); 3,024 mil. sq.m. (in 2013);

3,169 mil. sq.m. (in 2014 ); 3,23 mil. sq.m. (in 2015) and 3,385 mil.

sq.m. (by the results of 2016).

Ready square meters find their customers: according to data of the

Ministry of Justice of Ukraine, private and public notaries of Ukraine

certified about 228,057 purchase and sale contracts of apartments

and individual houses (excluding the AR Crimea and Sevastopol), which

increased by +19.0% or +36,371 contracts in absolute terms more than

in of 2015 (191,686 contracts). Positive dynamics is typical for all regions

of Ukraine with no exception.

In the structure of offer in Kyiv city and Kyiv region there are such

changes: the modern projects are characterized by less number of

rooms in apartments and the reduction of their area; more rational

planning; improved internal infrastructure.

A significant drop of the demand on the secondary real estate market

(traditionally linked to pricing in dollar) observed in 2014 and 2015 stopped

in 2016. This contributes to the rising price of 1sq.m. in new buildings, the

transformation by the developers installment programs in the less loyal,

delaying the terms of construction projects, increasing the risk of

unfinished buildings in the current crisis conditions, and some other

reasons. More popular is becoming the desire to purchase of housing in

commissioned buildings or in buildings with a high degree of readiness.

The average price of 1 sq.m. on the primary market of residential

real estate nominated in UAH 23,275 UAH, and for the year increased by

+522 UAH (or + 2.3%), and the price is nominated in US dollars amounted

to $911 per 1 sq.m. for the year decreased by -4.4 % ($ 42) due to

changes of the exchange rate of USD to UAH. In terms of the class on the

primary market «Econom» = 16,596 UAH (or $ 649) per 1 sq.m.,

«Comfort» = 27,885 UAH (or $1,091) per 1 sq.m., «Business» = 43,986

UAH (or $1,721) per 1 sq.m..

The weighted average price per 1 sq.m. on the secondary market

in national currency remains stable = 35,566 UAH and gradually

decreasing in dollar terms ($1,308 on February, 2017).

On condition of the normalization of economic and investment

climate, achievement of macroeconomic stability and the exchange rate of

the national currency should be expected active return of solvent demand

and the resumption of developers’ activity, temporarily filled the see and

wait position.


16

CONTACT INFORMATION:

Vadim Neposedov The President of Company

[email protected]

Igor Melnik Vice-President of Company

[email protected]

Yevgenia Loktionova Director of Company

[email protected]

Viktor Oborskiy Chief

of Strategic Consulting Department [email protected]

Konstantin Oleynik

Deputy of Chief of Strategic Consulting Department

[email protected]

Dmitriy Terekhin Analysist of Strategic Consulting Department

[email protected]

Ukrainian Trade Guild www.utgcompany.com

Thank you

“Ukrainian Trade Guild” (UTG) is a major national consulting company

in the sphere of real estate. Up to date UTG is presented by 55 highly skilled

specialists and by over 500 clients. Participation in 450 business projects and carrying out over 1000 market researches give us an opportunity to be a

reliable, responsible and competent partner. Our working experience with real estate

of any size and type at various stages of project guarantee a high professional level and individual approach to tasks set

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residential real estate market of kiev overview: 2016 … residential market... · pecherskiy...

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