Real Estate in Times of War. Where Ukrainians are Investing?

Viktor Andrukhiv

By Viktor Andrukhiv, Co-founder of Fibermix and Savex Minerals

Ukrainians have always been fans of investing in square meters instead of, let’s say, Apple stocks. Real estate investments seem more controlled because of this. However, with the onset of full-scale war and the constant threat of shelling, such investments lost their status as reliable. Despite this, Ukrainians continue to invest in real estate. Is it profitable to invest in square meters now? And what business opportunities does the market offer?

Viktor Andrukhiv

The sector that collapsed in February 2022 is slowly recovering. For example, investments in primary housing in 2023 are nearly five times lower than in 2021: figures dropped from $9.7 billion to $2.08 billion. The reasons are obvious – overall uncertainty about the future, missile strike risks, and migration processes.

From my own investment experience, many construction projects have been frozen since the beginning of the war. Developers are not rushing to put properties into operation if 20%-30% of the apartments in a building are unsold. At the same time, potential buyers are not rushing to purchase housing. Thus, a vicious circle forms, and the primary market stagnates.

A different situation arises with the secondary market – investing in completed and renovated housing appears to be a less risky investment.

Geography of Investments

In a year, the rating of price growth was led by the Ivano-Frankivsk region, where the square meter price increased by 48%. The trend for housing in Western regions persists. However, over the last six months, Kyiv has regained its position and tops the list of cities with the highest housing prices. The average price per square meter in the primary market in Kyiv is 57,460 hryvnias, and in the secondary market, it is 50,400 hryvnias.

How Businesses are Reacting

Before the war, one of the most popular ways to earn on real estate was the resale of primary housing. Investors bought apartments in the early stages of construction, and after completion, the profitability of the apartments reached about 30-35%. Now, with the primary market partially frozen, new trends for earning on the secondary market have become clear.

Smart Trend

This trend was around even before the war but has picked up speed recently. The reasons include a large number of migrants who do not want to spend a lot on rent and the migration of young people. People aged 20-30 are looking for property to start in a new city. They have a limited budget and prioritize comfort and services: internet, heating, hot water, instead of square footage. Investors see this need and shape their offerings. For example, they actively buy secondary housing and convert living spaces into smart apartments.

This strategy has several advantages. Instead of a 100-square-meter apartment, an investor gets four smart apartments. They can make many efficient decisions: resell some apartments, rent out others. Overall, I see a trend towards efficient use of square meters. There are cases where people even convert garages into living spaces.

Migration processes in the country have also affected another branch of the industry – short-term and seasonal rentals are in significant demand. Hostels provide a steady income with low expenses for cleaning, management, and utilities. To set up hostels, entrepreneurs often buy floors in buildings on the secondary market and convert them into the necessary rooms.

What to Consider When Investing in Real Estate

Trigger points may vary depending on the desired investment result: one-time income through resale or a constant one, as in the case of hostels. Markers also depend on the real estate market. For example, when investing in the primary market, pay attention to the following:

  • Reputation of the construction company. Research the company’s previous projects. Are all cases successful, or is there frozen construction somewhere? What is the average term for putting buildings into operation?
  • Reputation of the owner of the construction company. Analyze not only the firm’s activities but also find out how trustworthy the owner is. Check registries for debts and search the internet for possible publications in the media.
  • Location. The location directly affects the liquidity of your investments. Check how developed the infrastructure is in the construction area, how far it is from transport networks, whether the area is safe, and how far it is from military objects. Is there currently any demand for real estate in this location? Check marketplaces. To test demand, you can even post a fake listing and wait for feedback.
  • Gas or electricity? Blackouts have made Ukrainians more willing to buy apartments with gas supply.
  • Not too high? This point, like the previous one, is a consequence of the full-scale war. If Ukrainians previously dreamed of views and invested in top-floor housing, the threat of missile strikes has made them reconsider priorities. Housing on the fifth floor is now much more popular than housing on the twelfth.

When investing in the secondary market, pay attention to the following aspects:

  • Building condition: walls, communications, roof. Will you have to completely change the plumbing, hide cracks in the walls, and repair a leaking ceiling? Old buildings may hide their skeletons in the closets.
  • What about utilities? It’s worth raising calculations for the year and checking the average bill for services.
  • Who’s in charge? It’s better to find out about building management. How conscientiously does the housing cooperative or management company operate? Are there complaints from residents? You can talk to potential neighbors to gather complete information.
  • Demand. Check the demand for real estate in this area through marketplaces.

Currently, it can be said that Ukrainians continue to invest in housing, even despite the war and the threat of missile strikes. There is demand, and the market responds to needs and general sentiments, forming supply. The real estate sector, which experienced a decline in February 2022 and withstood it, is gradually and slowly but steadily recovering. For businesses, these are new opportunities worth considering.

All the photos in the article are provided by the company(s) mentioned in the article and are used with permission. 

Disclaimer: This article contains sponsored marketing content. It is intended for promotional purposes and should not be considered as an endorsement or recommendation by our website. Readers are encouraged to conduct their own research and exercise their own judgment before making any decisions based on the information provided in this article.


Please enter your comment!
Please enter your name here