The main tendencies of residential real estate market of Kyiv

  03.09.2007 Socmart Company has gathered and analyzed the situation on almost 300 residential projects, which are at the stage of building or design in Kyiv. Information about developers, investors, general designers, planned years of putting into operation, districts of the projects location, volumes of residential and total areas, numbers of floors, number of apartments, and other data of the projects has been studied.

The quantity of dwelling in Ukraine, which has been put into operation in the first half of the year, made 3947,6 thousand square meters, rate of increase makes 123,8% against corresponding period of the last year. The total cost of the dwelling, which has been put into operation, makes 8252,8 million hryvnias. The leaders according to put into operation dwelling are Kyiv with 593,5 thousand square meters, Odesa region with 352,7 thousand square meters, Kyiv region with 300 thousand square meters, Lviv region with 275,5 thousand square meters and Autonomic republic Crimea with 208,7 thousand square meters, Derzhkomstat (State Statistics Committee) informs. The total amount of put into operation buildings is 15631.

In Kyiv 1,2 million square meters of dwelling have been put into operation, about 9000 apartments have been offered for sale in 2006. But these volumes can not supply the demand for new dwelling. In the second quarter of 2007 dwelling putting into service in the capital has been increased twice. According to the data of State Statistics Committee, builders put into service 383 thousand square meters of capital dwelling in the second quarter. In spite of some slack with purchase and sale in the market of residential real estate, which is connected with overpricing and the coming elections (and thus nervous political situation in the country), it is rather for a time. The welfare of the Ukrainians increases, banks do conditions of mortgage credits more attractive. The need for own dwelling or housing improvement, most likely, will continue to induce the Ukrainians to buy residential real estate, even if there is overpricing.

At the moment building of more than 200 residential buildings, complexes, micro districts are being conducted in Kyiv. Approximate laying of buildings/complexes according to the district looks like this:

As we see, an absolute leader by the number of residential buildings in Kyiv is Shevchenkivskyy district, at the second place is Darnytskyy district. But, if one will consider the area volumes of projects under construction, then Shevchenkivskyy district loses priority, indeed a lot of complexes are situated in the central part of the city and pretending to be elite they are medium floor erections with small number of apartments. It worth to mention the extensive development of residential project building on the left bank of Kyiv. Besides, projects in bedroom communities often are built and designed as mixed-use, where shops, an entertaining center, service points and an office center are offered for future residents of a multi-functional complex under one roof in the large area. Such objects are: Меga-City, Dhiprovska Prystan, the complex in 31-32 Pravdy prospect (Pravda avenue), RC in 3 Sribnokilska street and so on.  

After Ukrainian Building Association, 5 classes of residential real estate exist in Ukraine, namely social dwelling, economy class, business class, premium and de-lux. If one applies this classification to Kyiv buildings and complexes under construction, we will have such a table:

A class of a project has been determined based on the parameters determined by UBA and positioning of a project as well. We have added transitional classes (economy-business, business-premium) because of either lack of information about some buildings under construction and complexes or possibility to subsume a project to both classes by its important characteristics. Practically there is not social class of dwelling under construction, as such, in Kyiv. About one third of residential real estate in the building stage belongs to economy class. As a rule, they are buildings and complexes located in dormitory communities, where most of the apartments are one-two roomed of comparatively small metric area, with minimal social infrastructure. A share of elite housing (premium and de-lux classes), in analytics of Socmart company opinion, makes somewhat more than 20%. They are usually located in the central part of the city, or they are buildings of club type with few apartments, or residential apartment complexes with maximally developed internal infrastructure, a large car park, an interesting architectural project. The cost of a square meter in the elite real estate sector fluctuates from 3 to 15 thousand dollars for meter. Although Kyivan premium and de-luxe classes in residential real estate do not answer European standards at all, developers try to draw attention to their projects by something special. For example, in RC Dolphin they offer at choice several designer variants of apartment decoration what is included in cost (unfortunately, putting into service apartments with any decoration is now uncommon), in RC Alpiyskyy for certain quantity of bought area a future resident receives a car place free of a cost, in RC Triumph there is an interesting novelty for Ukaraine, including Kyiv – a “smart home” system.

The main developers in residential real estate market are such companies as Kyivmiskbud, Zhytloinvestbud-UKB, Ukoinvestbud, Granite, IBK-Stolytsia. “The 21th century” (21 век) company, TMM, Mirax mainly operate in the elite housing segment.

A last important news in residential building can be considered past competition for calculating values of 80% of shares of Kyivmiskbud holding company and possible sale of this  80% of shares. Possible buyers are Mirax groop and the 21th century.  Here is a reference about KMB (Kyivmiskbud). Holding company Kyivmiskbud finished 2006 with after-tax (unconsolidated) profit of 15,98 million hryvnias. In holding company Kyivmiskbud about 98 companies operating in building market and market of building materials are included, namely 6 subsidiary enterprises, 35 public companies, 4 limited companies and 53 associate companies. According to the data of the company 80 % of HC Kyivmiskbud shares belong to Kyiv city council.

The stoppage of 111 buildings in Kyiv by Derzhmiskpromnagliad two months ago connected with violation safety rules is a bad indicator. Unfortunately, it is often happen in the capital that building of projects starts without necessary preliminary permissions or with violation safety rules. Residential buildings and complexes are let on time extremely seldom. Often on the tags in building sites you can see the year of putting into operation 2005 or 2006.

Concerning the projects which are at the stage of a scheme it is necessary to mention progressive increasing of the projects where there are office and trading functions as well as residential one.

You can offer a full version of Analytical review of residential real estate of Kyiv (about under construction and design projects of residential real estate, volumes of putting into service areas and apartments according to years, districts, classes, forecasts, indexes of places for cars, lay-outs according to number of floors, internal infrastructure and distributions and analysis according to other parameters. Cost in cash is 260$, cashless - 290$)

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