PRICE TRENDS IN THE UKRAINIAN REAL ESTATE MARKET

Abstract

The article is dedicated to a comprehensive analysis of price dynamics and the identification of key determinants that shape pricing trends within the Ukrainian real estate market (REM). The research's relevance stems from the segment's critical role as a highly sensitive indicator of overall economic stability, reflecting the level of solvent demand, and reacting to significant migratory movements, large-scale military shocks, and subsequent structural transformations of the national economy. The study’s objective is not merely to record factual changes in the prices of residential and commercial properties, but also to develop a robust predictive model capable of assessing the long-term consequences of macroeconomic and geopolitical shocks on market equilibrium. The research employs a multifactorial approach that integrates several core methodologies: econometric modeling (to establish quantitative relationships between prices and macroeconomic indicators), statistical and comparative analysis (to assess price differentiation across regions and property classes), and indicative valuation (to monitor key investment signals and market sentiment). The objects of analysis include time series data on prices in the primary and secondary housing markets within Ukraine's major regional centers, spanning the period from 2014 to the present. Particular attention is paid to a detailed examination of both traditional macroeconomic factors (such as inflation, the NBU key policy rate dynamics, real disposable income levels, and volumes of foreign direct investment) and the specific wartime factors (including the impact of state subsidized mortgage programs, the intensity of internal migration flows toward western regions, and the inherent risks associated with infrastructure damage). The empirical results obtained confirm the hypothesis regarding the asymmetry of the market reaction, where a significant reduction in demand (primarily caused by population outflow and pervasive financial uncertainty) more rapidly leads to a substantial decrease in the volume of transactions and the supply of new construction, rather than a proportional decline in prices. This phenomenon suggests a high degree of market inertia and underlying speculative pressure, which fundamentally complicates the attainment of a new economic equilibrium. Furthermore, the study identifies critical financial and operational risks for developers, specifically those related to the sharp rise in construction costs due to currency devaluation and the critical shortage of skilled labor. The practical value of this research lies in providing substantiated forecasts for price trend development, which holds strategic significance for shaping government housing policy, enabling effective financial risk management within the banking sector, and guiding investment strategies necessary for post-war reconstruction and recovery efforts.