Why are real estate prices rising?

In recent years, real estate prices in Ukraine have shown a steady increase despite economic and social challenges. Let’s consider the main factors influencing the rise in housing costs, as well as forecasts for the real estate market.

Main Reasons for the Increase in Real Estate Prices:

• Perception of Real Estate as a Reliable Asset: During periods of economic instability, real estate is considered a stable and reliable investment. This contributes to increased demand and, consequently, rising prices.

• Increase in Construction Costs: Since the beginning of the full-scale war, construction costs have risen by 40%. This is due to higher prices for energy resources and building materials, as well as logistical difficulties and labor shortages.

• Limited Housing Supply: In safer regions such as Lviv, Uzhhorod, and Ivano-Frankivsk, there is a limited supply of real estate. This drives prices up, as demand exceeds supply.

• Deferred Demand and Inflation: In times of economic uncertainty, many people postpone home purchases, leading to an accumulation of demand. Inflation also contributes to price increases, as construction materials and other resources become more expensive.

Real Estate Price Forecasts:

Experts predict that real estate prices in Ukraine will remain high in the near future. Key factors influencing prices include inflation, rising construction costs, and deferred demand. A significant drop in housing prices is not expected, although short-term market corrections are possible after the end of the war and economic stabilization.

Recommendations for Potential Buyers:

• Assess Financial Capabilities: Before purchasing a home, carefully evaluate your financial situation, taking into account possible economic changes and inflation.

• Consult with Experts: Seek advice from real estate professionals to get up-to-date market information and recommendations on selecting the best property.

• Consider Alternative Regions: If your budget is insufficient for buying a home in your desired city, explore options in other regions where prices may be more affordable.

Conclusion:

The rise in real estate prices in Ukraine is the result of a complex interplay of economic, social, and political factors. Potential buyers should closely monitor market changes, assess their financial capabilities, and consult with specialists before making a purchase decision.