Difficult times are expected. The expert told what will happen to the real estate market by the end of the year

By the end of the year, the exchange rate is expected to rise by about 2 hryvnia to one dollar. This will complicate the situation in the real estate market, as new housing will become more expensive and the purchasing power of the population will decline. Therefore, developers should reconsider their investment strategies. This opinion was expressed in an exclusive commentary to UNN by Olena Sosedka, co-founder of Ukraine’s first fintech ecosystem Concord Fintech Solutions.

Context

The Verkhovna Rada has begun consideration of the draft State Budget for 2025. MPs have until October 1 to submit proposals, and the first vote will take place by October 20. The document sets the exchange rate at 45 hryvnia to the dollar. Olena Sosiedka previously predicted that the dollar would continue to rise, and by early 2025 the price of the currency could rise by about 2 hryvnia. 

The rise in the dollar to the projected level of UAH 43-44 per dollar in 2024 will have a significant impact on the real estate market in Ukraine. First of all, it will lead to an increase in the cost of construction materials, most of which are imported, which will raise the cost of construction. As a result, new residential and commercial properties may become less affordable for a wide range of buyers

In addition, she said, the devaluation of the national currency usually makes investors and developers more cautious about new projects due to increased risks and income instability.

At the same time, those who have already invested in real estate may see prices for existing properties rise, as real estate often becomes a safe haven for investment in crisis situations

At the same time, the expert does not rule out that the dollar’s appreciation may weaken the purchasing power of the population, which will lead to a decline in demand, especially in the residential real estate segment.

Thus, the market is expected to face challenging times for both buyers and developers, which requires a more careful approach to planning investment strategies for the rest of this year and next

Recall

Ukraine and the IMF reached an agreement at the expert level on the fifth revision of the $15.6 billion program. According to media reports, the IMF is likely to demand that Ukraine devalue the hryvnia, cut  its discount rate, and raise taxes. Fulfillment of these conditions will allow Kyiv to receive the next loan tranche of $1.1 billion.