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🌐 On July 23, 2024, an exclusive panel of the Confederation of Builders of Ukraine on the topic "ANALYSIS OF THE UKRAINIAN REAL ESTATE MARKET: FIRST HALF OF 2024" was held.

👤Oleksandr Chervak, CEO of CBU, noted as moderator: "We know what a great shortage of personnel is observed in all sectors today. According to official data, we already have a shortage of 4.8 million workers for stable GDP growth. And these numbers are only for the open market. In addition, there is a problem with the reservation of workers. We also have problematic factors affecting the market. In particular, the monetary policy of increasing the exchange rate, increasing tariffs for electricity and its disconnection, shortage of personnel, raising taxes and others.

The participants discussed general analysis of the construction and real estate market, lending, the situation on the market of office, warehouse and logistics real estate, industrial parks, the metal market and other issues.

👤Tetiana Sytnyk, Head of the B2B and strategic research department of the CBR company, informed about the dynamics and sentiments of businesses in the construction industry.

📈In the first quarter of 2024, the dynamics of construction is ahead of the economy in general. Thus, in 2023, the increase in construction volume compared to the previous year was 25%, and in the first half of 2024, the increase compared to 2023 was 40%. As of today, the dynamics are approaching the indicators of 2016.

However, the expectations of representatives of the construction business regarding the future differ. As Tetiana Sytnyk noted, the shortage of workers is the main reason for the decrease in confidence. With the increase in the number of orders, there is a decrease in the number of specialists.

Tetyana Sytnyk listed the top 5 problems that construction companies are currently facing: a lack of workers, a drop in demand, a lack of working capital, an increase in material logistics costs, and supply disruptions.

Also, the range of businesses planning to invest in construction is quite limited. Thus, 14% of the entire representative sample of Ukrainian businesses plan to invest in construction.

👤Olena Unanyan, LUN Development Director, presented the state of the residential real estate market based on the results of the first half of 2024.

In particular, she provided data on the start of sales of new residential apartments. So, among the leaders, the largest number is observed in Lviv, somewhat less data in Kyiv and Kyiv region, among other regions in the top five: Ivano-Frankivsk, Zakarpattia and Ternopil.

💰As Olena Unanyan pointed out, the biggest price increase took place in Ivano-Frankivsk, Uzhhorod, Lviv, Rivne and Chernivtsi. If we compare the number of transactions on the secondary market, then in 2024 it increased by 1.7 times compared to 2023. At the same time, on the starter market, this number doubled.

👤Olena Dmitrieva, First Deputy Chairman of the Board of Globus Bank, analyzed the mortgage lending market. Thus, over the past year, mortgage portfolios of banks have grown by 60% in monetary terms and by 13% in quantitative terms.

💬Olena Dmitrieva commented on the state of lending when buying a home using a housing certificate: "Those who buy with housing certificates, they have enough of the certificate cost." She also noted that the opportunity to use a housing certificate as a down payment under the eOselya program will help increase the number of mortgage loans, as the rate will be 7%.

📊According to Olena Dmitrieva, the share of starter market remains low - 5% in 2024 (277 loans), but it is gradually increasing. She also noted that mortgage loans are paid off faster than the schedule - in an average of 6 years.

As a result of rising prices, the average amount of new mortgage loans increased significantly: up to UAH 1.7 million, which is 95% more than in February 2022.

👤Anastasiia Kachan, Senior Consultant for office real estate at CBRE Ukraine, presented an overview of the Kyiv office real estate market for the first half of 2024.

According to her, the Kyiv office market continues to show signs of stabilization. Thus, the level of gross absorption increased by 15%, and the new offer increased by 89%, amounting to 25,000 square meters.

Also, Anastasiia Kachan noted that the gap between requested and effective rates is decreasing, and accordingly, the tenant and landlord markets are becoming more balanced.

🌇Although the demand for offices continues to grow, the structure of gross absorption is dominated by small deals with an area of ​​200-500 sq.m. In addition, the future supply of offices remains limited, and the pace of construction of existing projects has slowed.

💬Separately, Anastasiia Kachan noted the problem related to the lack of electricity: "All owners and lessors of office centers are trying to cope with the outflow of customers. Generators fail, and this is the situation in every city where there are consumers. Now they continue to increase the power of generators, because the energy supply needs are constantly increasing. But we understand that there should also be a healthy limit to this. We cannot increase the number of generators and fuel indefinitely."

👤Dmytro Kalinichev, Commercial Director of Dragon Capital Property Management, informed about the current situation in Ukraine, as well as forecasts for the warehouse and logistics real estate market and industrial parks.

🚛As Dmytro Kalinichev noted, the vacancy rate of warehouses remains consistently low (less than 2%). At the same time, the tendency to increase rental rates remains, for example, as of the beginning of 2024, the average rate was equal to $4.9.

Dmytro Kalinichev also predicted the intensification of the restoration of premises at the request of customers, in particular, with the involvement of foreign investments. Thus, under the influence of demand, the vector of current development has changed from the relocation of objects as earlier to expansion.

👤Serhiy Kovalenko, Commercial director of Vartis, presented the state of the black rolled metal market in Ukraine and its impact on the construction market in the first half of 2024, noting a significant increase in demand for rolled metal: by 50% in the 1st quarter of 2024 compared to the 1st quarter of 2023.

💬 "Basically, all the jumps in the consumption of rolled metal and construction mixtures are in March and April. In particular, thanks to the construction of shelters, fortifications and increased restoration of damaged housing. You can compare the statistics with the data of the previous speakers: a certain increase in the consumption of rolled metal is equal to an increase in the purchase of square meters in new housing complexes", - noted Serhiy Kovalenko.

🔋He described the problem caused by the lack of electricity - even if the manufacturer finds a way (generator, etc.) to load the product, the customer cannot unload, because this process takes place on construction sites mainly thanks to electricity. In addition, blackouts lead to downtime, increased costs for payment of services, and, accordingly, to the cost price.

Serhiy Kovalenko also cited a number of factors on which the market will depend in the second half of 2024: the intensification of the construction of the second and third lines of defense, possible changes in electricity consumption, the availability of a mechanism for booking the required number of employees to ensure the operation of the enterprise, and the observed trend of a decrease in the number of vacations.

You can view the recording of the discussion panel at the link (Ukrainian language):

👉On the CBU Facebook page:

https://www.facebook.com/watch/live/?ref=watch_permalink&v=436782469351249 

👉On the CBU YouTube channel:

https://www.youtube.com/watch?v=ZB7PE79x34M 

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GLORY TO UKRAINE! 💙💛