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What is the current state of the residential real estate market, and how has the situation changed during the year of the big war?
Since the war began last February, the registers were closed and nothing was sold. In the summer, when they were opened, sales have started, but on a small scale. Later, when our military went on the offensive, people became optimistic and started buying housing. The market has significantly revived since 2023. Until recently, prices in Lviv were approximately the same as before the war, but it was possible to bargain. People who wanted to sell made concessions: they could drop up to 20%. Now, there is no such thing.
According to official data, there are more than 250,000 refugees in the region. But unofficially, according to the head of Lviv regional military administration, there may be up to 500,000. Are these people the potential buyers of apartments and how do they affect the market? As for the displaced people I have worked with, most of them still plan to return home. My clients from Kharkiv, for example, are nostalgic for their city, just like clients from Mariupol. They have hope to return, even though their homes are destroyed. The resettled people rent housing in most cases, and later, perhaps, they will also buy them.
Nowadays, apartments are usually bought by Lviv residents who hesitated and waited for a year. There are also many Kyivans. However, now there is a demand for luxury housing, which nobody bought last year, so the situation is changing.
Please, tell us more about the prices. An apartment in a new building in Lviv last year cost 800-1000 dollars per square meter. How much is it now?
The price is about the same, maybe a little higher – it starts at $1,000 per square meter. You cannot buy housing in Lviv for 700-800 dollars per square meter, except for remote areas – Ryasne-2 or Vynnyky in the Lviv suburbs. The price has increased because materials, metal, and the cost of work have become more expensive.
People prefer ready-made housing with documents. Before the war, they preferred to invest in construction at the stage of digging a pit and laying a foundation. Now, they don’t risk it.
What is your forecast for the cost of housing for the next six months to a year?
It is difficult to predict here, but everything indicates that prices will rise. Lviv is quite far from the frontline, and many people return from abroad because they do not know how to find themselves there. There is inflation in the world and in our country, the war is still going on, and everything is getting more expensive, so housing prices will only increase. Lviv survived the fall in real estate prices last summer and autumn.
As I said, the prices are affected by the cost of materials, wages of builders and, of course, demand. If it is, then the price will increase, and if not, it will decrease, but not significantly, because no one wants to remain at a loss.
What is the current average price for secondary housing in Lviv?
The market is very diverse. If you take «Czech houses», standard two-room apartments in high-rise buildings, the price will start at $1,000 per square meter.
Are potential buyers paying attention to repairs in the apartment?
Any «Czech house» has the correct layout, such apartments are mostly in habitable condition. On the other hand, in a new building, you still need to invest at least $500 per square meter in repairs, if not more. That is, secondary housing is an apartment where you can live immediately after making cosmetic repairs and replacing the bathroom.
There is now a demand for secondary housing because not everyone has the financial ability, in addition to buying an apartment, to invest in repairs.
At the end of 2022, the National Bank noted in its report on financial stability that the real estate market in Ukraine is in a state of imbalance – rental prices have decreased while price of real estate is increasing, although the demand for it is very low. Is the situation in the real estate market in Lviv different, and what are the reasons?
Yes, the situation in Lviv is special – not everything is so bad here. For example, in Ivano-Frankivsk or Ternopil, the real estate market is in a different situation, because there are fewer enterprises and less finance. Their enterprises suffered significantly from the war and economic changes, and Lviv has a market for IT specialists – people who work remotely, earn foreign currency, and the demand for their services does not decrease.
IT specialists from Kharkiv and Odesa came to Lviv and also earn good money here. They have the opportunity to pay rent, and this is interesting to investors. It is profitable to buy an apartment for rent in order to have a passive income. This affects demand, buying and renting.
Have the requirements of customers changed, perhaps they began to ask more often about the availability of storage, to be interested in whether there are strategic or military facilities nearby?
Last year, at the beginning of the full-scale war, there were such requests. Now, there are none, people are used to war. Security is now quite conditional everywhere, the missile can «arrive» both in the village and in the city.
The buyer’s requirements are now the same as usual: comfortable housing for a normal price. They only ask about parking places, kindergartens, schools nearby, and convenient transportation.
Housing prices in Lviv also depend on the districts. According to the real estate website LUN, the most expensive square metre is in the new buildings of the Halytskyi (central) district of Lviv – more than 87 thousand hryvnias (about $2.2 thousand). It is cheaper in Lychakivskyi and Frankivskyi districts – more than 52 and 50 thousand hryvnias ($1.2 thousand) per square meter, even cheaper in Zaliznychnyi – about 45 thousand hryvnias ($1.1 thousand). Shevchenkivskyi and Sykhivskyi districts are the cheapest: the price of a square meter in a new building is over 42,000 hryvnias ($1 thousand).
Such a trend has been observed for years, but it is still changing. What do these numbers depend on?
Yes, there is such a trend. However, generally speaking, real estate prices in the city centre have declined. I had a client from Australia, he was looking for an apartment in Lviv, in the nearby centre. He bought such a house as an investment, maybe to resell it later. In his opinion, such real estate is currently undervalued. It is realistic to find a price slightly more than a thousand dollars per square meter. This is my first client for such a segment after the coronavirus epidemic.
In general, the prices in the city centre have fallen, because there are no tourists, and therefore, there is no demand for daily rent. Locals often look for new buildings or housing away from the centre, where it is more comfortable, where some kind of park is located, as well as places to park cars.
In recent years, Pidzamche district is gradually becoming more attractive. It used to be a depressed area, now a road has been repaired there, the jam factory has been restored, and modern housing is being built. Also Shevchenko Street, which was depressed, but now it will have a new road and interesting establishments.
In addition, the price in the districts is «extracted» by places of work. There are many offices in Frankivskyi and Zaliznychni districts where IT companies work, so their employees form the price for renting or buying housing. There is no such thing in the Pasichna area, it is beautiful there, but the prices are lower.
Has the cost of renting changed in Lviv?
At the beginning of the big war, there was chaos. Now, everything has normalized, the middle segment has returned to pre-war prices. To rent housing in new buildings, you need to pay $400-600 per month for one or two rooms. In two-room «Czech houses», it costs approximately 10 thousand hryvnias ($250).
Has the commercial real estate market grown?
Last year, there was a hot issue of warehouses. For a while, they were significantly more expensive than offices. People moved businesses and stored their equipment. Now, everything has stabilized, prices dropped to pre-war levels. Those who wanted to relocate their companies, did so in the spring or summer of 2022.
I don’t see any activity right now. Some were seeking premises for food establishments. For example, such entrepreneurs moved from Kharkiv. Shops and dental offices were also opened. There is no significant demand for offices, but these is a noticeable demand for premises for medical facilities: clinics, small offices, in particular, veterinary ones. They are opened by both townspeople and refugees.
Business works and adapts. At the end of March last year, just when our Armed Forces knocked the enemy out from Kyiv, I had no job, 10 people lived at home. I was constantly looking for a place to live, resettling visitors, working as a volunteer, not a realtor. Just then I get a call from Kyiv. I thought it was probably necessary to accommodate someone. But they said they dealt with toys: «We want to open a toy store in Lviv. Help us find a place.» To be honest, I was very surprised. And what do you think? They did find premises and opened this shop... We are a nation that cannot be destroyed. The enemy has just been driven away, and we are immediately thinking about how to open a toy store, continue to work, and develop. We are special people.
In 2015, I had clients – a Danish sewing company. I was seeking production premises for them. Their leader was from Lithuania. 2015, the war continues, the events under Debaltseve, the Minsk agreements, the dollar jumps... We are walking along Rynok Square, and she sees that some cafe is opening, and she says to me: «If there was such a jump in the currency in Lithuania, inflation would be at least 10% from the one you have, not to mention the war, Lithuanians would turn to psychologists instead of opening businesses.» Therefore, we are very adaptable and resilient.
Victoria Savitska, Translated by Vitalii Holich
Photo: Tvoe Misto
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