The residential property market in Kyiv is demonstrating stability and growth. More than 1.73 million square meters of residential space was commissioned in 2017. That is more than 30 percent more compared to the previous year.
Earlier, only commercial property was of interest to international investors, but the situation has changed in favor of housing over the last two years. This has been due to there being reasonable prices for apartments, and relatively high rent rates. The increasing demand is for new property, as the lifetime of old housing is coming to an end, as it now fails to meet modern requirements for comfort and security.
In 2018 the main foreign investors in Kyiv residential property were from Western Europe and Asia. For instance, citizens of Germany, Italy, Austria, France, Switzerland, Israel, China, India, Iran, Iraq invested in real estate constructed by UKRBUD corporation, which is one of the largest construction organizations in Kyiv. This list is increasing steadily, as satisfied foreign investors are encouraging other non-residents, who are at the stage of studying risks and benefits of future investments, to enter the market.
At the moment, Kyiv’s new-built property market has wide range of offers for any kind of budget. If the main goal is to effectively invest money, it is better to put it into the early stage of construction when a minimum price per square meter is set by the developer. This price will rise with the progress of construction work, therefore a 100 percent payment at the start of construction will be the most profitable investment. Some 95 percent of apartments are usually sold out before the residential complex is put into operation.
Let’s assume you bought a one-bedroom apartment at the groundbreaking stage at the cost of $25,000, and the general expenditures on apartment remodeling with furniture and equipment amount to $10,000 – its rental price will be Hr 15,000 per month, not including utilities costs. That will bring you more than $6,000 in income per year. Besides, it is important to remember that the larger the apartment, the lower the cost of remodeling per square meter. Moreover, the cost of investment in residential property grows the closer it comes to being put into operation.
For instance, if you’re ready to make investment at the start of construction and wait for two to three years, the value of one square meter will rise by 30-50 percent in national currency. Obviously, no bank deposits offer such a return. Furthermore, the return of an investment made at a right time will be even higher than you expect. The time before building companies increase their price per square meter is the best time to buy new-built property. It is not hard to determine this time, as construction companies usually warn about a future rise of prices. For example, a 10-percent average price increase is expected in the coming months. And if you invest in a new building now, still at the old price, the capitalization of the acquired apartment will grow by 10 percent.
Investments in property are safe and are not at risk of depreciation even in the case of a devaluation of the national currency.
However, it is important to take into account that modern customers don’t want just ordinary apartments. They want a certain lifestyle consisting of many elements, together with high-quality construction. They want to be sure that their home is a safe place to live, and there is a good provider of utility services. It is also important to know if there is a way to decrease expenditures on utility payments.
With this purpose, UKRBUD corporation is the only development company in Kyiv to start installing a smart home system in every apartment in its residential complexes. This is a huge program implemented jointly with startup CLAP, which produces equipment that ensures security, comfort and savings. The system can also record and analyze figures from ultilities meters and make payments automatically, saving time and predicting expenses for energy resources. It also can set limits on energy use, and make corrections depending on the time of the day to choose the best and most cost-effective option.
It has to be noted that any investment activity is risky. So you have to make sure that the chosen project will be completed. For this reason, a construction company’s reputation matters a great deal, as well as the number and quality of the residential complexes it has built. It is also important to check if the company is able to stand the test of crisis. Of course, a project analysis is a must. However, the details of both approval permits and mechanisms of investment have to be researched, and you should consult your lawyer if necessary.
