Opportunities in the real estate market of Ukraine: from real to potential

[roseline371274]

At a conference in the Swiss city of Lugano in 2023, Ukraine announced the required investment amount of $750 billion for recovery and received approval from representatives of the US, EU and international financial institutions regarding potential sources of financing in two tranches in 2023-2025 and in 2026-2032. It turns out that the projected macroeconomic situation in Ukraine will create opportunities for the real estate market and urban recovery.

Among the opportunities in the real estate market for urban renewal, one can note the state program for affordable housing for the population, developed and introduced in October 2022, "eHousing".

The e-Housing program is implemented by the Ministry of Economy of Ukraine together special database with the Ministry of Digital Transformation and Ukrzhytl. According to the Ukraine Economic Outlook (2023), this initiative allows Ukrainians who do not have their own housing to take out a mortgage at a rate of 7% per annum. The terms of the initiative provide for the registration of a mortgage in banks and compensation by the state for a reduced interest rate, since at this stage in the market banks offer rates of 13-18% per annum. The e-Housing program applies to apartments in multi-storey buildings built no more than 10 years ago.

Rebuilding cities after war: main risks

The main risk for developing a plan for urban recovery is the significant uncertainty surrounding the lack of a possible timeframe for the end of the war. There are several scenario plans for the end of the war (from a return to the 1991 borders or February 24, 2022 (without the annexed Crimea and Donetsk and Luhansk regions) to the Russian Federation’s attempts to seize the entire territory of Ukraine, and a significant number of options in between), which could significantly change the content and priorities of such a plan.