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Real estate market in Ukraine

In spite of the political instability, bureaucracy, corruption, unstable investment climate and other “national” characteristics of the Ukrainian economy, the foreign investors still do not loose their interest in Ukraine. Being on the stage of transformation and having powerful potential, the Ukrainian economy sometimes opens up possibilities unachievable in “old” economies of the developed countries where the high profitability level is considered usually in 15% meanwhile in the countries with the transitional economy it is possible to get 25-100% level of profit.

    The real estate market is now one of the most dynamically growing markets in Ukraine. The demand on in is still way ahead of the supply. Thus, the prices on the real estate market in Ukraine are increasing steadily. There is a huge shortage not only in residential constructions, but administrative and office blocks, trade and storage buildings, entertainment complexes, hotels, etc. Considering the fact that Ukraine will also host 2012 UEFA European Football Championship, the results for the real estate market and building activity are evident: new world class hotels, restaurants, stadiums, infrastructure, etc.

    The level of the investment profitability for the commercial real estate projects in Ukraine is 12-15% a year. While the same index for the real estate markets in such countries like Hungary, Czech Republic and Poland is only 6% per year. Pay-back period for the trade real estate in Ukraine is 3-5 years, office - 5-8 years, in Europe, for instance, 10-15 and 12-15 years, correspondingly.

    There are already many potential Western investors who examine and looking for the different approaches of entering the Ukrainian real estate market. A point is that not all of them can find partners to invest together into the Ukrainian economy and develop their projects. Another serious problem is that to fulfill the project in Ukraine a developer or a builder will need 10% of time more than in other countries of the world. Unfortunately, we still do not have that clearness, transparency and rules subordination which are inherent to many European countries.

    Traditionally, the most attractive to investments are the biggest cities of Ukraine like: Kyiv, Kharkiv, Dnipropetrovs’k, Donetsk, Odessa and tourist regions in the Carpathian Mountains and Crimea.

Foreign investors usually prefer to buy finished buildings with lessees or to participate together with the Ukrainian side in building projects. Any foreign citizen may buy property in Ukraine, except agricultural lands and non-privatized property.

In case of buying residential real estate the foreigner will need the following:
·    the Ukrainian taxpayer certificate;
·    a passport;
·    a notarized copy of a spouse’s consent (if married) to buy property in Ukraine, copy of the marriage certificate and spouse’s passport.

Usually the foreign buyers open a bank account in Ukraine to transfer the money. The procedure is quite easy, to open an account you will need:
·    a passport;
·    the Ukrainian taxpayer certificate;
·    a proof of foreign origin of the money (if you put the money on the account when opened it): a custom’s declaration, exchanging cash bank receipt or circular checks, or a bank receipt of receiving cash with the credit or debit card.

While selling-buying property operations several taxes are to be paid: a 1% of the general tax, a 1% of the Ukraine Pension Fund deduction. Plus to this real estate agencies usually charge 3-5% for their services and 1% for the property insurance (optional).

    It is necessary to admit one more time that bargains in sphere of buying-selling real estate are quite complicated and important; you need to take into account legal, fiscal, bookkeeping aspects. In Ukraine there is practically no established, stable practice and debugged legislation in this sphere. The slightest omission or neglect is able to affect the fidelity and legitimacy of the paper work and ownership right transition. Article written by Oleg Lavrentyev, based on the Internet sources.

Read more related articles here:

Real Estate Prices in Ukraine

Opening a Bank Account in Ukraine



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