All Press Releases for September 03, 2021

The Demand for Ukraine's Real Estate is at an All-Time High: Why is it No Longer Worthwhile to Invest in Real Estate in other European Countries?

Ukrainian real estate is on the steep rise today, promising high returns on investments. It is a great time to invest today to get a very high ROI, which overcomes ROIs on the markets of other countries by 3%-5% at least.

    KYIV, UKRAINE, September 03, 2021 /24-7PressRelease/ -- Ukrainian real estate is on the rise in 2021. Some types of the property add more than 50% of cost annually (like detached houses), while others demonstrate assured growth of 10%+ at least. Why is this happening? We're reviewing the existing factors below.

Review of investment opportunities in Ukraine

In 2020, 2021, and further years, the existing growth of prices on the Ukrainian property market isn't expected to stop. It began in early 2020 due to such factors:
• Political and financial stability. Covid-demics did not affect the Ukrainian economy much. At least, not in the major way it affected other developed countries of the world. The GDP drop was only about 4% annual and it has been recovering pretty swiftly. Lockdowns were not global and the pandemic was restrained.
• Currency stability. Hryvnia or UAH, the national currency of Ukraine, has been always dropping in cost in the period between 1996 and 2018. But then, in 2019, it started gaining weight and the trend (more or less) continues ever since. In 2021, UAH costs the same as it was in 2016. It gives a lot of assuredness to people looking for local property investment opportunities.
• The improvement of economic stability and the country's assured development. Submitting it shortly, the current president and his team already did more for Ukraine than all presidents before him altogether. No wonder Ukraine becomes more alluring for investors.
• Russian War in Ukraine does not scare people as much as pro-Russian 'panicking' bloggers tell. In fact, it only scares Russia, which fears its end.
• Ukrainians have had years of thriving bank deposit rates, which were flamboyant between 15% and 25% annual. Now, as they've dropped to 7-10% annual at most and taxes eat up 19.5% of interest income, people have no more real investment opportunities rather than to buy real estate. Ukrainians also don't have free access to stock trade, as people in the USA and the EU have. And, with stable UAH, they've lost the last source of investment – buying dollars to resell them in the future. So, real estate is the only capability for Ukrainians to make their money not devoured by inflation.

Why real estate investment in Ukraine worth it
The average annual inflation in Ukraine for the period of 2000-2021 is 11.75%, with the same index for three final years being equal to 5.2%. If the deposit interest per year paid on hand is 6.84% (after taxes, net), then the annual savings or capital gain would only be 1.64% in 2019-2021. While the same annual thing for the owners of square meters of real estate in Kyiv is +430% for 15 years (from UAH 8,500 per 1 square meter in 2006 to UAH 36,800 per 1 square meter in 2021)! That is, an average annual growth, with all its intermediary ups and downs, is +28.7%! This is the most whopping increase in cost that we've ever seen in any market!

What does it tell? The obvious data above and some of the new data below predict the following real estate trends:
1. Inflationary push of the cost of real estate throughout Ukraine is high because people have been left with only one opportunity for stable investments.

2. A lot of cash on hand – according to the NBU (Central bank of Ukraine) people in Ukraine hold around 13 billion Euros under their mattresses. This money mostly doesn't fuel the economy but the shifts are seen – people in 2020, 2021, and following years are going to take this money from under their mattresses and buy real estate. Only in this manner, they're able to save their money from depreciation. Even the dollar keeps dropping compared to hryvnia, so it makes no sense today to hold money simply lying down.

3. With broader access to cheaper property loans by banks, the population and developers are aimed at more objects of the primary market of housing. Although it is still significantly costlier in Ukraine to buy a new property and finish it than to buy something old and refurbish it, the state-funded economic program is only valid for new construction, inevitably increasing its share on the market in general.

4. It is still high-cost for a regular citizen to buy a regular apartment. It takes slightly over 20 years to pay for a 70-square meter apt. in Kyiv, while in most European countries it takes between 7 and 10 years (with extremes of 12.2 years in the Czech Republic and 3.1 years in Ireland). So private investors are still rare, paving the way to institutional investors.

If you look at European markets and read their housing market predictions for 2021 and 2022, you will find that some developing markets like Slovakia, Bosnia and Herzegovina, the Czech Republic, or Bulgaria show some nice numbers.

However, Slovakian Bratislava shows the increase in property cost in 2021/2020 in 13% annual, which is not even comparable to the average +28.7% Ukrainian! Using straightforward calculations, you find out that your Ukrainian property (better, in Kyiv) will add 100% to its price on average in 3 years 6 months, while you should wait for the same occurrence in Bratislava, the EU's hottest market today, for 7 years 8 months.

And that's to add to the increase in the cost of rent! So, if you buy some apartment in Kyiv or elsewhere in hot areas of Ukraine and let it for rent, you get 100% of ROI even faster – in about 2 years 11 months. So, how about investing in Ukrainian real estate before it gets to the high plateau?

DGY Investments offers services in real estate investment at affordable prices. The personal approach and results-oriented mindset of our professionals will help you to become a successful property investor with a stable passive income.

The purpose of the company is to ensure outstanding financial possibilities for people who have decided to invest in real estate. Our team of experts provides a full stack of services on a property which includes apartment acquisition in Ukraine, house renovation, design projects, etc. With the help of our property management company, you will be able to fulfill the most sophisticated requirements and make your investments extremely profitable.

Don't miss the chance to contribute to your wealthy future together with DGY Investments.

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Gil Attia
DGY investments
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