Despite expectations among some potential international buyers, it looks fairly safe to say that there will be no major wartime collapse in Kyiv real estate prices, especially not in the historic city center. Kyiv’s crisis-resistant property prices reflect a number of factors including Ukrainian resilience, low carrying costs, and the role played by real estate as the country’s most popular economic asset.

As early as March 2022, before the Russians had even retreated from Kyiv region and northern Ukraine, our real estate agency began receiving inquiries from potential foreign buyers seeking “hot deals.” Seemingly following the advice of billionaire investor Warren Buffet to “be greedy when others are fearful,” these buyers were looking to pick up properties at rock bottom prices.

I told one investor that prices were down about 10-15% for those who did want to sell, but advised that there were not many motivated sellers. He explained that he was hoping to find something for around 1000 US dollars per square meter. I replied that the only properties in that price range would be in Bucha and Irpin, which were then still reeling from weeks of brutal Russian occupation that had left both Kyiv suburbs partially ruined.

A look back at the recent history of Kyiv real estate prices reveals a high tolerance for crisis conditions. Prices in Kyiv’s historic city center have not been as low as 1000 US dollars per square meter since the late 1990s. They did not approach this level during the crisis sparked by Russia’s 2014 invasion, even though Ukraine then received very little international assistance compared to the support the country can currently count on.

In 2014, there was actually an initial bump in Kyiv real estate prices due to an influx of people displaced by the Russian invasion of Crimea and eastern Ukraine’s Donbas region. After this, prices did begin to drop slowly but surely before bottoming out in 2017. Two years later, prices began to climb, with a sharp increase beginning in early 2021. By the time of Russia’s full-scale invasion in February 2022, real estate prices were almost back to where they had been in 2013.

There are a number of reasons why potential foreign investors often have unrealistic expectations regarding how the Ukrainian real estate market will react to extreme circumstances. Firstly, as the Russians have learned to their cost, Ukrainians are extremely resilient and often demonstrate remarkable tenacity when times are tough. They also veterans of a turbulent post-Soviet period that has been marked by frequent crises. The idea that they would dump their most valued assets just because the country had been invaded would not even occur to most Kyiv property owners.

Secondly, many outside observers do not fully appreciate the role that real estate plays in Ukrainian society. In addition to its basic function as a home, properties often serve as an investment, insurance policy, family asset, and more. When you remember that many Ukrainians remain distrustful of banks and have limited access to other forms of investment, attitudes toward real estate begin to make more sense.

A third key factor is demand and supply. Kyiv was already massively short of suitable housing before the Russian invasion. With the city’s population now returning to prewar levels and many new housing projects on hold, the market is very tight. Far from decreasing, most market analysts expect prices to rise thanks to factors including ongoing population migration to Kyiv and the country’s progress toward EU membership. With carrying costs for Ukrainian real estate still extremely low, it is easy to understand why property owners have little interest in selling at low prices.

Current rental market trends support the cautiously optimistic outlook for Kyiv real estate, with monthly rates for properties in the historic city center now surpassing prewar prices from late 2021. Many categories of apartment remain in short supply and can typically be rented within days or even hours of becoming vacant. With rental rates on an upward trajectory, it is hard to imagine apartment sale prices falling dramatically. Instead, I would not be surprised to see Kyiv property prices increase in 2024.

About the author: Sean Almeida is CEO of Vestor.Estate real estate agency and has been resident in Kyiv since 2012

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