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Primary housing market investment-attractive in eight Ukraine's regional centers, secondary market in 14 – Uvecon study

KYIV. Sept 10 (Interfax-Ukraine) – The primary housing market is investment-attractive in eight, the secondary market in 14 regional centers of Ukraine, investment analyst of GIS Uvecon Roman Shepetko has told Interfax-Ukraine.

According to the study "Investment attractiveness of residential real estate in the regions of Ukraine" conducted by the geographic information system Uvevon, in 2020 the primary housing market was the most attractive for investment in only nine regions.

Vinnytsia region has the best result, compared to 2019, prices in the primary housing market in dollar terms increased by 25.5%. In Khmelnytsky region – by 14.9%, Zakarpattia region – by 13.4%, Kherson region – by 12.9%, Donetsk region – by 12.6%, Volyn region – by 12.6%, Cherkasy region – by 11%, Rivne region – by 10.8%, and Mykolaiv region – by 10.5%.

Roman Shepetko said that among the regional centers, the indicators of the investment attractiveness of the primary housing market are somewhat different: in Vinnytsia, the rise in prices in dollar terms in the primary housing market over 2020 is 26.6%, in Khmelnytsky – 16.9%, Lutsk – 15.1%, Kyiv – 14.8%, Cherkasy – 11.8%, Sumy – 11.8%, Rivne – 10.7%, and Kherson – 10.3%.

"The rate of growth in prices in the primary housing market in these regions and regional centers exceeded the profitability of alternative investments, such as the purchase of government domestic loan bonds, interest on bank deposits," Shepetko said.

In the secondary housing market, Khmelnytsky region became the most investment-attractive region of Ukraine in 2020, where the rise in prices in dollar terms was 18%. In Chernihiv region, secondary real estate increased in price by 15.3%, in Dnepropetrovsk region – 14.7%, Rivne region – 14.2%, Kyiv region – 13.4%, Poltava region – 13.3%, Volyn region – 12.9%, Vinnytsia region – 12.5%, Sumy region – 12.2%, Zakarpattia region – 11.3%, Kirovohrad region – 11.2%, Zaporizhia region – 11.1%, Zhytomyr region – 11%, and Cherkasy region – 10.6%.

In regional centers in this indicator, high positions in 2020 were occupied by: Khmelnytsky – the cost of apartments in the secondary market increased by 19%, Chernihiv – by 16.2%, Sumy – by 15.9%, Poltava – by 15.2%, Rivne – by 14.2%, Zaporizhia – by 13.4%, Kramatorsk – by 13.1%, Lutsk – by 13.1%, Uzhgorod – by 13.1%, Zhytomyr – by 12.9%, and Cherkasy – by 12.8%. Secondary real estate in Severodonetsk, where the leadership of Luhansk region was located at the time of the study, went up in price by 12.5%. In Dnipro, an increase of 11.9% was recorded, in Kyiv – by 11.2%, and in Vinnytsia – by 11.1%. The growth rates of real estate in the above regions exceeded the return on alternative investments.

In the rating of investment attractiveness of households, the most investment-attractive region was Kyiv region. Here, over 2020, the growth in house prices in U.S. dollars was recorded at the level of 18.2%. In Kirovohrad region, there was an increase of 17.5%, in Vinnytsia – by 14.2%, in Mykolaiv region – by 13.9%, Dnipropetrovsk region – by 10.7%, and Zhytomyr region – by 10.6%.

In this housing segment, high positions in 2020 were taken by the following regional centers: Sumy – an increase of 18.9%, Poltava – by 18.4%, Cherkasy – by 17.7%, Lutsk – by 15.8%, Dnipro – by 15.1%, Kyiv – by 13.4%, Chernihiv – by 12.4%, Zhytomyr – by 11.7%, Kharkiv – by 11.2%, Severodonetsk – by 10.9% and Mykolaiv – by 10.5%.

In turn, CEO of Uvecon Group Volodymyr Shalaev, commenting on the results of the study, emphasized that over the past three years the investment attractiveness of residential real estate was based on several factors, including: 1) limited opportunities for storing and augmenting citizens’ funds, 2) low confidence in government securities, 3) development of new high-quality housing formats, 4) partially inflation and growth in consumer prices for goods and services, 5) decline in profitability in 2020 from investing in government bonds, as well as a decrease in rates on term deposits for citizens.