What influences demand in the primary housing market in 2024?

09.07.2024

Marianna Bigunets, Sales Director of GAZDA Construction Company, provided a detailed account of the main factors influencing demand in the primary housing market in 2024

First and foremost is the issue of future life security amidst wartime conditions, particularly the risks of enemy shelling and potential aggressor advances. Concerning protection from missile and drone attacks, the most secure regions since the onset of full-scale invasion are Zakarpattia, Chernivtsi Oblast, and Kyiv (due to robust anti-air defenses). Some western and central regional centers like Zhytomyr, Lviv, Ivano-Frankivsk, Vinnytsia, and Dnipro experience fewer shelling incidents. "The security category remains conditional, as the war continues and predicting future damage consequences is nearly impossible," emphasized the specialist.
The balance of price, quality, and living space in future housing developments is another critical factor. Potential buyers are interested in properties where these characteristics are balanced. They are willing to purchase at prices 25-30% above market average if comfort and quality standards are met. Mariana Bigunets highlighted examples such as low-rise buildings (5 to 9 floors) and the need for developers to cater to diverse citizen needs, from students to large families. "In the market, there is renewed interest in smart housing formats with areas starting from 25 m². Optimal maximum apartment sizes in the comfort living category can reach 160 m², suitable for full-sized 3-4 room accommodations for families with two children," added Mariana.
Infrastructure complexity alongside recreational potential is also crucial. Buyers are concerned with the local security of residential complexes, cottage towns, or townhouses (closed territories, surveillance cameras, and round-the-clock security). Ample parking spaces, shops, and other essential services are equally important. Developers' provision of child-friendly, sports, and entertainment facilities, as well as the location of residential complexes or cottage towns (distance from city centers, transportation connectivity, and proximity to picturesque nature like forests, lakes, and rivers), also influences buyer decisions.
Investment potential is another significant consideration. Buyers look not only at purchasing housing during construction stages (at prices 35-40% lower on average than post-completion prices for potential resale) but also for renting it out to generate passive income. "Since early 2023, professional investors have returned to the market due to increased migration within the country caused by the war. Citizens urgently need quality housing in secure regions," noted the expert.
Methods of acquisition also play a pivotal role. In addition to full upfront payments, potential buyers are interested in installment plans with price fixing and minimal initial deposits (starting from 30%) during the construction period (up to 2-3 years). However, the litmus test for buyers is undoubtedly mortgage availability, including joint programs with developers and banks, as well as accreditation of developers and their projects in the state mortgage program "eOselya." Mariana Bigunets underscored these factors as critical in shaping the dynamics of the housing market in 2024, reflecting both consumer preferences and the broader socio-economic context influenced by ongoing geopolitical challenges.