Kyiv’s buildings — and its real estate market — show both the charm and decay of one of Europe’s oldest cities. With a growing metropolitan area population of 3.4 million, adding 200,000 residents each year by city estimates, the market is rebounding. But construction of new homes and offices is still not meeting the demand.
In the commercial sector, most of the 1.8 million square meters of office space is filled. The vacancy rate is below 5 percent. Rising rental prices may spur new construction. New shopping malls and hotels continue to be built.
On the residential side, people find real estate to be a safe investment. The lack of affordable credit is a double-edged sword: Prices stay low, but prospective buyers who can’t come up with the purchase price are locked out of the market. Kyiv has about 1.2 million apartment units, dominated by two-room apartments under 60 square meters.
The lack of rule of law causes big problems. Scammers and raiders go unpunished. Builders ignore the rules. The construction industry is not competitive and seems to be controlled by people close to Kyiv Mayor Vitali Klitschko. Poor city planning and the lack of property taxes have turned parts of the city center into ghettoes with abandoned buildings.
In our fourth Real Estate edition, we talk to the experts, highlight trends, describe challenges and identify solutions.
