Despite the full-scale war and socio-economic challenges, Kyiv continues to present vast opportunities for those seeking not just property, but a significant investment in the capital. This trend reflects a path to stability and growth, where investments in elite real estate have the potential to significantly multiply capital.
With insights from Kostyantyn Pisarenko, founder of the real estate agency T.H.E. Capital, we explore how elite real estate in Kyiv can be a key to success in unstable times, and what the market dynamics mean for investors.
The State of the Elite Real Estate Market in Kyiv
The current state of Kyiv’s elite real estate market shows notable changes:
- Decrease in Demand: The demand for elite properties has dropped by 7-8 times compared to pre-war levels.
- Stable Rentals: Rental requests remain stable, indicating a preference for renting over buying among potential buyers.
- Price Adjustments: Discounts on high-end properties average 30%, with potential further decreases to 2022 summer levels. Meanwhile, rental prices have only increased by 15% since 2021.
Investor Insights from Kostyantyn Pisarenko
"Do our clients have money? Yes. However, they are not ready to spend this money on buying real estate. Buyers in the Comfort+ segments and above are only willing to invest if there are significant discounts or exclusive properties available," says Pisarenko. Sellers, on the other hand, are generally not in a hurry to sell, often waiting for better market conditions.
Market Segments and Influences
- Lower-Class Segments: These are heavily influenced by external factors like military actions and state support programs. The cessation of approved loans in May led to decreased activity in this segment.
- Comfort+ and Above Segments: These are less affected by external factors and continue to attract investment.
The Attractiveness of Elite Real Estate to Investors
Kyiv remains Ukraine's leading and most protected city, with high salaries and a developed labor market. Despite the decline in sales and construction volumes, capital real estate remains attractive due to its stable financial situation and market recovery prospects.
- Market Share: Kyiv and the surrounding region account for 24% of Ukraine’s real estate market. Construction has primarily moved to western regions, but Kyiv still retains significant activity, with about a quarter of pre-war sales restored.
Profitable Investment Strategies in Luxury Real Estate
Supporting the Ukrainian real estate market while diversifying investments to reduce risks is crucial. Pisarenko advises against investing all funds in one project, suggesting diversification across different residential complexes and cities.
- Investment at Construction Stage: This remains highly profitable, despite risks related to developer reliability.
- Rental Yields: Current yields in Kyiv are 5-7% for residential and 7-8% for commercial real estate, with occasional exceptions but generally stable figures.
Conclusion
Kyiv's elite real estate market, despite the socio-economic and wartime challenges, offers substantial opportunities for investors. The blend of historical charm and modern investment potential makes Kyiv a unique and promising market for those looking to secure and grow their capital in uncertain times.
