The Ukrainian residential construction market is entering a phase where a decrease in prices for new buildings is nearly impossible. This conclusion was drawn by leading developers during the annual LUN Conference 2025. According to them, in the coming years, the cost per square meter of housing will rise due to a number of factors affecting the industry.
This is reported by Finway
Key Factors Influencing the New Building Market
Among the main reasons hindering price stabilization, experts highlight the reduction in the number of new projects compared to the volume of commissioned housing, a severe shortage of skilled workers in construction, as well as a significant increase in material and labor costs, which has led to a rise in construction costs by tens of percent. Additionally, banks have virtually ceased lending to developers, and portfolio investors, who previously invested funds at early stages, have almost completely exited the market.
Igor Nikonov (KAN Development) warned investors about the risks of excessively low prices in the primary market. He emphasized:
“Don’t be misled by dumping. If a company lowers its price due to a lack of sales, there is a high probability that the project will simply not be completed.”
Igor Huda (“Creator-Bud”) noted that the cost of construction has already increased by 30%, and selling apartments in Kyiv for less than $1500 per square meter is currently economically impossible. Sergey Pylypenko (Koval’s Group of Companies) added that the market is currently functioning mainly due to projects launched before the full-scale war: for every five completed projects, there is only one new start, which gradually creates a shortage and pushes prices upward.
Supply Shortage and Prospects for Buyers
Alexander Ovcharenko (Standard One) explained that the postponement of new starts is related to the gap between the rise in costs and the selling price, forcing developers to delay new projects. Yevgen Favorov (Ukrainian Association of Developers) emphasized that today in Ukraine, the volume of commissioned housing exceeds the number of new starts, and the market is on the brink of a shortage, especially in Kyiv. The situation in Lviv is somewhat better, so the pressure on prices in the western region will be less.
A significant problem for the industry remains the actual lack of financing at the early stages of construction: banks do not issue mortgage loans to developers, and the state program “eOselya” only supports the final stages of projects. As a result, companies finance the first years of construction with their own funds, which is only accessible to large developers. For smaller companies, entering the market is becoming nearly impossible.
- It is expected that prices for new buildings will not decrease, and the rate of their growth will depend on the number of new starts.
- An excessively low price is more a sign of risk than a beneficial offer.
- The supply of housing will decrease, especially in large cities.
- The key criteria for buyers remain the reliability of the developer and their financial stability.