The luxury real estate market in Ukraine is experiencing a significant decline. Over the past year, sales in the premium segment have halved, and prices for luxury apartments in Kyiv have dropped by 30-50%. At the same time, construction costs continue to rise, further complicating the launch of new projects.
This is reported by Бізнес • Медіа
Premium Segment Losing Ground
As noted by Arthur Mkhtaryan, director of the Taryan Group development company, after the onset of the full-scale invasion by Russia, sales in the most expensive segment of the market practically came to a halt. Recovery only began six months later, but even now, the volumes of buying and selling remain significantly lower than before the war.
According to Mkhtaryan, while the average cost per square meter in the economy and business classes is gradually increasing, the premium segment is experiencing the opposite trend. The price of luxury apartments in Kyiv has decreased by 30-50% compared to 2021. Previously, in the secondary market, prices reached up to $7,000 per square meter, but currently, the average is around $3,500–$4,000.
Developers Halt Launching New Projects
The decline in demand and prices has significantly impacted business profitability. Developers are forced to reassess their strategies, as launching new projects in the luxury housing segment is losing its economic viability.
Due to the drop in demand and prices in the luxury segment, margins have fallen “to the point that starting new projects is currently unappealing,” noted Mkhtaryan.
Currently, market experts do not predict a quick recovery of activity in this segment, which may lead to further reductions in the number of new premium-class projects in the Ukrainian capital.