Is it worth buying an apartment now?
The Ukrainian real estate market is once again tested for strength. If quarantine restrictions continue, most developers will be forced to stop work.
There were almost no preconditions for a radical change of these tendencies. But in March the situation changed.
Should I make an investment decision now or should I wait? Not to be mistaken, it is important to understand what is really happening to developers. We answer the most important questions about the state of the market.
What is happening with construction
The restrictions caused by the quarantine regime throughout Ukraine will force many developers to reconsider the terms of delivery of objects.
According to our estimates, several apartment buildings in Uzhhorod and the region have been suspended since the beginning of March. At the same time, most developers who did not stop work were forced to slow down the pace of construction.
We see this not only from external statistics, but also feel the dynamics of sales of building materials. In April, we recorded a decrease in sales of basic construction products by an average of 35% compared to last year.
Companies whose activities directly depend on investors' investments were mostly forced to stop work on construction sites. However, large and self-sufficient developers still continue to build, despite external circumstances.
What happens to sales
Prolonged quarantine and disappointing forecasts of the spread of the coronavirus have naturally caused concern among investors in residential real estate. Developers felt this especially sharply in the first half of April, when sales and customer activity were requested even from large players.
According to the results of the month, the flow of potential customers to our sales departments decreased by 2-3 times.
In May, we see that deferred demand in the primary market has begun to partially convert into sales. This will be more active as soon as the activity of small and medium-sized businesses resumes in the country, approximately in the III-IV quarter of 2020, provided that the quarantine restrictions begin to weaken in the coming weeks. If the restrictions continue, most developers will be forced to stop work.
What happens to prices
The main factor on which the dynamics of prices in the real estate market will depend is the exchange rate of the dollar against the hryvnia. Given that the hryvnia is now strengthening its position, for many developers will mean an increase in costs for materials and construction work, and therefore a revision of prices is inevitable, but the delayed demand in the primary market does not allow to do so in the short term. According to our forecasts, we should not expect a reduction in the cost of construction this year.
Many property buyers can still take advantage of the anti-crisis promotions now offered by developers, with full payment. But in the long run, the price per square meter in new buildings in Uzhgorod will grow steadily, despite the disruptions in demand caused by quarantine.
