Analysis of Ukraine’s construction market in 2024 – Rauta director
In 2024, Ukraine’s construction market grew by 6% in monetary terms compared with 2023 and amounted to approximately 170 billion UAH (€3.9 billion). The main segments for investment in commercial real estate were warehouse and retail properties. The most attractive for building new buildings remain the Kyiv and Lviv regions, which have large populations and a favorable location relative to the main transport
In 2024, Ukraine’s construction market grew by 6% in monetary terms compared with 2023 and amounted to approximately 170 billion UAH (€3.9 billion).
The main segments for investment in commercial real estate were warehouse and retail properties. The most attractive areas for construction of new buildings remain the Kyiv and Lviv regions, which have large populations and a favorable location relative to the main transport routes. In 2024, the total area of new commercial projects increased by 65% compared with 2023. The warehouse segment grew by 111%, and the retail segment by 22%.
A vacancy rate of about 25% in the office real estate market has forced developers to slow down or halt the development of new projects in this segment. In Kyiv, most new business centers are projects whose construction began before the full-scale invasion. In Lviv, despite increased demand for offices, 75% less new office space was commissioned in 2024 than a year earlier.
In the commercial construction market, the hotel real estate segment showed the greatest growth, rising by 182%. This is primarily due to the active development of resort real estate in western Ukraine.
About 20% of the construction market is taken up by the restoration and protection of critical infrastructure facilities.
Demand in the primary residential real estate market grew by 12% in 2024. One of the important factors was the introduction of the eOselya program, a third of whose loans went to new-build housing.
In 2024, demand for installing solar power plants on the roofs of commercial buildings and private cottages grew significantly.
Prices
From 2019 to 2024, the cost construction in Ukraine doubled. At the same time, over the past year the cost of construction materials and services rose by approximately 24%.
Workforce
The shortage of skilled construction workers in blue-collar trades is increasingly felt. For some positions, specialists have to be sought for several months, and sometimes employees have to be trained in-house.
The lack of qualified personnel and high inflation are forcing employers to raise salaries and introduce new loyalty programs for employees. On average across the construction industry, salaries rose by 15% over the year, which also affected the growth of construction costs.
Construction companies are actively attracting pensioners and women to perform work that does not require heavy physical exertion: construction machinery operators, drivers, welders, etc.
The personnel shortage is prompting Ukrainian companies to consider recruiting construction specialists from countries in Asia and Africa.
Legislation
On January 1, 2023, the Law of Ukraine “On making construction products available on the market” (EU Regulation 305/2011) came into force, introducing a new market surveillance system to ensure the quality of construction materials. 2025 will be the last year in which the old and new regulations operate in parallel in the construction sector. Suppliers of construction products covered by this law will be required, from January 1, 2026, to draw up declarations of performance and register them in the unified state electronic system in the field of construction.
Amendments to Resolution No. 314 of the Cabinet of Ministers of Ukraine have, since August 2024, allowed foreign companies, during martial law, to carry out construction of facilities of consequence classes CC2 and CC3 on the basis of submitting a declaration to the licensing authority. This opens wide opportunities for foreign contractors to implement construction projects in Ukraine, especially those financed by international institutions.
For 2025, the Ministry for Development of Communities and Territories of Ukraine has planned to update 7 DBN (state building codes) and develop 80 standards aimed at introducing processes for optimizing design and construction, including BIM technologies, as well as removing barriers to the application of the Eurocodes.