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Monday, May 21, 2007

Land Around Kiev: Great Supply, Moderate Demand, High Price

Land market in Kiev suburbia has no volatility. Since 5 years, prices has stopped first time. And there is significant excess of supply. What does it mean? Perhaps, the enormous price growth with past few years. Look at this, pricing boom for last 4 month: Obukhov district + 95%, Kiev-Svyatoshin district +60%, Vyshgorod district +110, Brovary district +105%! In fact, prices must stop sometime, and here its is, I guess so.

Many experts say that prices exceed 100 USD/sqm are too high to grow more (Obukhov direction is absolutely different case, taking part of huge love of Ukrainian elite for that land).

But if in some time ago many people consider land plot and following single-house construction as an alternative way to solve their housing problem, now it is changed. Scary utilities, lack of retail, shopping and services, no entertainment, constantly rising land prices, and stability in apartment pricing lead people to think twice concerning moving to suburb.

I see some way to improve that situation: low-cost mortgage financing for single-family residential construction, improving and increasing numbers of infrastructure objects, roads construction. Last visible reason is new price growth in the Kiev’ multifamily residential could push land market to grow again.