Cookies on the this website
We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on this website. However, if you would like to, you can change your cookie settings at any time.
Continue

New to PropertyWire?

Welcome, and thank you for visiting our website.

PropertyWire is the leading publication for property investors and industry professionals interested in the world of international property investment.

Our aim is to give you intelligent commentary and analysis on the world of retail and commercial real estate.
If you've enjoyed what you've read so far why not sign up for our FREE property alert and online magazine PropertyWire Confidential.

Every week the PropertyWire team sends out a hard-hitting newsletter packed with news and analysis of the top stories plus the best investment opportunities on the market. We always look at the bigger picture like the Euro Crisis, and explain how this will affect YOUR investments.


Ask me later
No thanks

Tue
Sep 23rd
Lost Password? Register
Home arrow News arrow Europe arrow Cranes fall silent in Ukraine as residential construction halts

Cranes fall silent in Ukraine as residential construction halts

Wednesday, 29 October 2008
Residential construction in Ukraine has stopped
Residential construction in Ukraine has stopped

The property market in Ukraine is struggling with idle cranes dominating the Kiev skyline showing that most construction has stopped.

Having secured a deal with the International Monetary fund to shore up its faltering economy one of the worst hit sectors in Ukraine is residential property.

There are few buyers who can qualify for mortgages at current interest rates and loans from banks are scarce. As a result, developers are scrambling to raise financing for their construction projects, particularly residential, and halting work.

'The state of residential development in Ukraine is very bad. Some 75% of Ukrainians cannot qualify for bank loans and, at the same time, developers cannot secure loans on favorable terms to continue construction,' said Sergiy Maksimov, president of VAB Bank.

One struggling developer, Kiev based XXI Century which traded on the London Stock Exchange's Alternative Investment Market, has lost more than 80% of its value since July. It has tried to sell some of its projects in the pipeline to raise cash, but thus far few buyers can be found.

The current slump ends seven years of dramatic growth for the property sector in Ukraine, during which more than one million square meters of fresh residential space were constructed annually and yearly prices surged by double digits.

The Mirax Group, a Russian developer, has halted work on its $500 million project to build Ukraine's tallest building. Construction could resume next spring if the world financial crisis passes, a company spokesman said.

Industry experts expect falling prices. 'We expect a drop of nearly 20% in the secondary and mid-class housing markets by the end of the year. Some are even predicting a 25 percent correction,' said Terry Pickard, chairman of NAI Pickard.

Experts predict the commercial property sector to do better. The amount of office, retail and warehouse space in Kiev is among the lowest per capita in Europe. As a consequence, rental rates for commercial real estate in Ukraine far exceed the European average.

'Due to the intrinsic supply and demand disequilibrium in Ukraine's office and retail space segments, commercial real estate will weather the world-wide liquidity storm relatively well compared to the residential market,' said Sergiy Sergiyenko of CB Richard Ellis.

Gerald Bowers, general director EFG Property Services, a property investment, development and management group active in Eastern Europe, believes developers will increasingly move away from the capital city to regional cities where it is cheaper to build and there is growing demand.

'The residential market has calmed. Prices are not increasing. But prices have not deteriorated because the demand is still there. We are not going to see, as people say, the bubble burst,' he added.


BOOKMARK THIS PAGE (What is this?)     Digg!Reddit!Del.icio.us!Google!Live!Facebook!StumbleUpon!Newsvine!Furl!Yahoo!

 
Related News
More Recent News
Earlier News
To see all the latest news articles in our monthly online magazine, Property Wire Confidential, sign up free here



Europe: Top Headline

Spanish property sales now regarded as stable as they increase five months in a rowSpanish property sales now regarded as stable as they increase five months in a rowYear on year property sales in Spain have increased for five months in a row, signalling that the residential real estate market is becoming more stable.



West Tower

West Tower

Car park

West Tower

home rental guide

Limousin Guide

Barratt Homes

Limousin Guide

West Tower

Search for Properties:

Feature story

Student accommodation investment check List

It’s the UK’s strongest asset class, but are all student accommodation properties good investments? This is the comprehensive list of what to watch out for when buying student property.

 

Company news

Chestertons announces expansion in Spain

Chestertons has announced a new international associate in Marbella, Spain with estate agency Affinity Property Group as part of their international growth plans.

Finance Update

Nationwide resumes access to Help to Buy for home movers

Nationwide Building Society has announced that it is resuming access for home movers looking to participate in the government’s Help to Buy equity loan scheme from Wednesday, 24 September 2014.

Features

Student accommodation investment check List

It’s the UK’s strongest asset class, but are all student accommodation properties good investments? This is the comprehensive list of what to watch out for when buying student property.

 

Newsletter

Subscribe to our weekly newsletter and stay updated on the property market trends.
Subscribe now >>

Subscribe to our Europe property and real estate news feed (RSS)