Real estate market analysis from DIM partner Arsenii Nasikovskyi
Over the past year, a revival has been observed – the average share of investment deals on the market of Kyiv and the oblast is 15–20% thanks to liquid comprehensive developer projects that did not lose trust during the full-scale war. At the same time, the return of investors and the purchase of real estate for investment purposes depend significantly on geopolitical situations, news, reports and forecasts from the front line and on shelling of cities. For
Over the past year, a revival has been observed – the average share of investment deals on the market of Kyiv and the oblast is 15–20% thanks to liquid comprehensive developer projects that did not lose trust during the full-scale war.
At the same time, the return of investors and the purchase of real estate for investment purposes depend significantly on geopolitical situations, news, reports and forecasts from the front line and on shelling of cities.
For their own living, people choose the comfort segment. The average cost per m² in comfort-class new buildings is 1200–1500 dollars.
Investors are interested in the business segment, but exclusively in projects with a strong concept and a unique location with minimal competition.
For example, in the business-class complex OLEGIV Podil by DIM we see very stable demand from investors, who are interested in the location in the ancient Podil district, the architecture and our updated project concept in an art boutique format.
The usual format of a business-class residential complex at a price of $2000–$3000 per m² is not popular among investors. In most cases these are new buildings located in the Pechersk, Shevchenkivskyi and Holosiivskyi districts. Today a large number of apartments are offered here by owners on the secondary market, who are getting rid of them for various reasons and sometimes give a large discount, which creates strong competition with the developers' primary market.
Even last year, investors did not consider the premium segment for investment at all.
Now we can state an interest in premium real estate – the more expensive and unique the project, the more people buy specifically for investment at an early stage.
The closed pre-sale of the premium-class project The One by DIM exceeded all our expectations, and since the beginning of the year we have sold almost 30% of the apartments. This shows that people are ready to invest even at the excavation-pit stage in high-quality conceptual projects with innovative engineering solutions. Investors value exclusivity and are looking for assets to invest in. By the way, The One has the highest share of investment deals, because for buyers of premium real estate this is definitely not their main place of residence, but specifically a third, fifth or tenth apartment, bought specifically for investment.
The most popular among investors are 1–2-room apartments of up to 60 m². Almost 70% of our requests are for exactly these apartments, which indicates the interest of investors specifically. But I should note that this concerns our unique location, where there will be no more similar projects.
In general, the share of investment deals at DIM before the war was 50%.
Now demand for apartments as an investment is fairly restrained and amounts to up to 20%. People buy mostly to protect money from depreciation and to earn from resale in the future. There is also a small share of deals aimed at renting out the property.
A fundamental criterion for an investment buyer is to find a property with maximum yield and minimal risk. The biggest risk of investing in residential real estate remains the risk of non-completion. Therefore it is necessary to pay attention to:
– real, not nominal, construction progress,
– the number of m² commissioned during the war
– the developer's plans in the long term: whether the company plans new projects, improves current ones, follows and implements new trends.
– the developer's publicity and fresh, up-to-date publications in the media, social networks and on the website. Their presence indicates that the developer has long-term plans.
– the pace of sales. If sales are very slow and the discounts are suspiciously attractive – study information about the property and the developer more carefully.
High investor interest is also shown by quality suburban eco-clusters with a recreational component and a wide range of their own infrastructure.
For example, more than 20% of deals in the Park Lake City complex are purchases for investment purposes.
Let us add that in difficult times the company DIM, as a systematic developer with a quality product, always meets the buyer halfway. For example, we currently have many financial instruments in place: an installment program of up to 5 years with a first payment from 20%; a program in which fixed minimum payments of $300 to $600 per month apply in the first year, depending on the chosen number of rooms in the apartment; a program with flexible payment terms – the buyer makes a first payment of 30% or more until construction is completed and pays the remaining amount within two years after the property is ready; a program based on the trade-in principle – you can exchange any real estate you own for a new one.