Inflation and changes in taxation are driving up the cost of housing in new constructions by 15-25% in 2025, reported Marianna Bigunets, Sales Director of the construction company Gazda, to the Interfax-Ukraine agency.
"The year 2025 will be challenging for the real estate market. On one hand, there are several objective factors that will affect the price dynamics, while on the other hand, citizens' purchasing power will remain quite low," the expert noted.
In her opinion, the main factors that could impact housing prices in new buildings are inflation, the devaluation of the hryvnia, and changes in taxation.
According to forecasts, inflation in Ukraine may reach 10% in 2025, which will affect the rising costs of construction materials and construction and installation works. It is also expected that the average exchange rate of the dollar, to which prices in the primary market are usually tied, could be 45 UAH, meaning the dollar exchange rate may increase by an average of 10% compared to the current year. Significant impacts will also come from changes in taxation, specifically the increase of the military tax from 1.5% to 5% (except for military personnel and those equated to them).
Bigunets believes that in 2025, price differentiation is quite possible not only by housing class, project solutions, and degree of readiness but also by the safety of the region. "Moreover, the 'safety surcharge' could amount to about 10% on existing prices," she said.
Regarding the actual level of demand in 2025, according to estimates from the Gazda construction company, only about 20% of those who can financially afford to buy housing (whether full price, through installments, or mortgages, including via the state program 'eOselya') will choose the primary market over the secondary market.
The company added that the low level of demand could significantly intensify competition in the primary market, especially in relatively safe regions such as Transcarpathia, Lviv region, Bukovina, and Kyiv region.
"According to our estimates, in 2025, there will be an average of two new apartments being built for each real buyer in safe regions. This competition will require developers to make several important decisions regarding housing acquisition methods: for instance, for installments, it may be possible to reduce the down payment from 30-50% to 10-20% and extend the repayment period from three to five years," Bigunets noted.
Another important aspect in 2025 will be the focused reorientation of the state mortgage program 'eOselya' towards the primary market. According to the expert's forecast, next year, depending on various economic and military factors, about 30-35% of all housing purchases in the primary market may come from this program.
As for the share of purchases through other mechanisms, 'commercial' bank mortgages may account for 5-7% of sales (thanks to joint programs between banks and developers), the volume of full-price transactions will not exceed 10%, while purchases through installment programs will constitute about 50% of total sales.
In Bigunets' opinion, the price increase in the second half of the next year may slow down somewhat. "2025 will be a logical continuation of the 'distress' in the primary market. However, according to macroeconomic forecasts, it should be expected that starting from 2026, the economic situation will significantly improve, which will affect not only construction rates but also sales volumes," she concluded.
The construction company Gazda was established in 2007. Currently, its portfolio includes 13 housing construction projects. The total area of completed real estate exceeds 150 thousand square meters. In 2023, Gazda commissioned 22 thousand square meters. Currently, three projects are under construction in Uzhhorod: Residential Complex ParkLand, Residential Complex Grand Hills, and a new phase of the cottage town Sherwood.
The company is a participant in the state preferential mortgage program 'eOselya' (the Residential Complex ParkLand and KM Sherwood are accredited).