By KYIV. Dec 6 (Interfax-Ukraine) – Almost two-thirds of development companies in Ukraine are on the verge of bankruptcy, Volodymyr Sementsov, the co-founder and managing partner of INSPI Development, told Interfax-Ukraine.
"Now the risks for developers and investors are perhaps the biggest in the last 15 years. Up to two-thirds of development companies are on the verge of bankruptcy (i.e., unable to fulfill their obligations to buyers and business partners). At the same time, a total of up to 30% of investors who bought housing with the help of installment and mortgage programs, for objective financial reasons, cannot pay off the accumulated debt," Sementsov said.
He predicts that in 2023 the market will live in precisely such difficult conditions. At the same time, he identified the main factors that could positively affect the primary residential real estate market next year.
He considers the forecasted and controlled level of inflation to be a stabilizing factor, which in annual terms will not exceed 25%.
He also expects a reduction in the cost of construction by an average of 15% due to the competitive price of construction materials and construction and installation works (cost reduction will be an important safeguard for the nominal price growth per sq m for the buyer) and an increase in the income level of citizens by an average of 15-20%.
An effective policy of the country to restore the economy and attract investments aimed at lending to the construction industry and, in particular, developers at 3-5%, as well as preferential mortgage programs that can spur demand, can help stabilize the market.
According to the expert, with the full convergence of all factors in 2023, a partial resumption of demand may occur, but compared to March-April 2022, within 10-15%.
"In the next two or three months, the market will continue to have a minimum (point) demand for new buildings, mainly economy and comfort class, with a readiness level of 80% or more. At the same time, more than 90% of buyers will be interested in purchasing housing only in a few cities: Kyiv, Ivano-Frankivsk, Lviv, Chernivtsi, Uzhgorod and partially in Odesa," the specialist noted.
