As Alexander Ovcharenko, owner of the developer Standard for epravda, pointed out, there is no cooling of the market and there will not be. It is enough to look at the price dynamics of recent years: against the background of macroeconomic fluctuations, it is much more stable than it might seem.
“Let’s compare prices in the primary housing market as of mid-2025 with pre-war 2021 and with 2024. In 2021, primary home prices rose 16.7% – it was an active and fairly typical year for the period.
In 2024, already at war, the pace was virtually unchanged: +15.7%. As of the second quarter of 2025, the dynamics remained similar – about 16-17% year-on-year. In the third quarter, prices slowed to 12.8% vs. 14.1% for the same period in 2024. One-bedroom apartments rose in price the most – by 13.3%, two-bedroom apartments by 13.3%, and three-bedroom apartments by 11.7%.
That is, the cost is gradually increasing and the dynamics is the same as it was before the big war. The only difference is that the basic cost of construction today is already much higher than in 2021, and this is what determines the behavior of the market”.
Reasons for rising prices: prices, labor shortages and new safety requirements
“The main factors for the growth are changes in the structure of construction and logistics costs, rising labor costs, and completely new requirements for safety and engineering in homes. If we compare the cost of construction and installation work, the difference between 2021 and 2024 is impressive. In 2021, the CMR index is up 20.4%. In 2024 – by 7%. In 2025 – by 3.7% in the first months alone.
That is, the cost of production does not go back down: the growth dynamics is maintained. It is the finishing works – what completes any object – that have significantly increased in price. And the reason for this is the shortage of labor. As of today, the shortage of workers on construction sites reaches 50%. This is a huge shortage of labor, so to reduce the shortage – revised wages. Salaries in construction have risen by multiples. In 2021, the average salary in the industry was at the level of 11-12 thousand UAH. In 2024, it rose to almost 17 thousand UAH, and in some projects exceeded 19 thousand UAH per quarter. This is almost a doubling of labor costs – a key cost item.
New requirements to safety and energy resistance are added to this. After the first blackouts in 2022, developers had to rethink the engineering of houses. Today, quality projects are required to have backup power supplies, the ability to operate elevators during a blackout, autonomous heat and water systems, shelters, and in some complexes, even outlets that work during a blackout. It is clear that these solutions do not make construction cheaper and are not temporary. On the contrary, they raise the cost of production, which will not return to the level of 2021.
It turns out that the cost of housing construction since the beginning of 2025 has increased on average by 10-25%, depending on the class of housing. And if we take the whole period of the big war, we are talking about all 100%, or even more. So to expect prices to fall in the primary market is to ignore real changes in engineering, human resources, and safety requirements. The war did not break the market – it only changed its structure.”
Demand is growing: who is shaping it and how?
“Another factor in price growth is demand, which, despite the war, persists and even grows. First of all, this applies to Kyiv. The city remains the center of work, business and infrastructure. The capital is a magnet for internal migration. As a result, the demand in the capital is growing faster than in second-tier cities (although Lviv is not lagging behind). And this does not only apply to buying – rent is also becoming more expensive, which automatically stimulates investment deals.
It is especially noticeable in the segment of income-generating real estate build-to-rent. The format, which a few years ago was incomprehensible to most buyers, today creates new opportunities for investors. Many of them are looking for more predictable and understandable tools for investment. The occupancy rate in such buildings rarely drops, which reduces the risks for those who consider such housing as an investment. For example, the occupancy rate of our S1 VDNKh property has been consistently over 98% during all these “war” years.
The demand is formed not only by investors, but also by households returning to big cities, internal migrants, young specialists, etc.”.
Shortage of apartments: why there are no conditions for prices to fall on the market
“Another factor that will not allow prices to fall is the shortage of supply. The lack of apartments on the market is a consequence of several underlying processes that have been going on since 2022 until now.
Many buildings have been damaged or destroyed. With the outbreak of war, most developers have suspended construction or postponed. Commissioning volumes have fallen by leaps and bounds, and there are far fewer new permits being issued than in 2020-2021. Rising construction costs often do not correlate with rising real estate prices. This forces developers to “hold back” their projects until better times, and this is quite common in Kyiv.
All this has caused a shortage of supply. Now there are simply not enough new apartments on the market, which could reduce the price due to competition.
It is expensive, risky and difficult to build today. As a developer, I will say that it also requires courage and faith in the country. Not all companies are ready for this, so fewer new projects will be launched. Supply in the coming years will grow slower than demand, which means that the price trend will be natural – only upwards. Not because of “developers’ greed”, but because of real economic conditions.
Understanding this logic will allow investors and buyers to make much more rational decisions and look at the market not through the expectation of a “bubble” and when it will burst, but through the prism of actual structural changes”.
