The number of unfinished construction in Ukraine is growing: what do investors and market experts say?

In the context of a full-scale war, not all residential complexes in Ukraine continue to be built at a particularly active pace. Results like this Focus in his new review “Apartments in Spring. How much does an apartment cost in a new building and will it be more expensive?”

According to the contractors’ reports, the resumption of work at construction sites is often nothing more than an imitation of violent activities, as interviewed experts explained to the publication. According to Victoria Bereshchak, a real estate watchdog, of the more than 90% of projects that have announced resumption of work on construction sites after the start of a full-scale occupation, only half actually build and give no appearance.

At the same time, Bereshchak, Only 25% of developers are able to demonstrate acceptable construction rates, which is approximately 7-10% of the monthly readiness of the facility..

The intensity of construction work during a large-scale war has significant regional differences. According to Vladimir Sementsov, co-founder and managing partner of INSPI Development, the share of active construction sites in the total number of facilities under construction is as follows:

• Regional centers in Western Ukraine (Lviv and others): 35%;
• Kyiv: 30%;
• Odessa: 12%;
• Dnipro: 10%;
• Kharkov: 7%;
• other regional centers (Vinnitsa, Zhytomyr, Poltava, Cherkasy): 6%.

Project lag times are changing more and more. Some companies are practically lagging behind schedule. And there are those who leave investors in complete uncertainty about the prospects for the restoration of the business and even more – their completion.

According to Victoria Bereshchak, The delay in the construction of housing projects in Ukraine in the spring of 2023 reaches an average of 8-14 months. according to the addressee FocusThe developers, who managed to keep working before the Russian energy terror began, managed to save time. After all, winter power outages further complicated the situation.

as described Focus Anna Murashenko, commercial director of Really BuildingAt many construction sites, mandatory downtime due to power outages lasted four months, and only at the end of March – beginning of April, most construction projects should return to normal operating speed. Thus, for some projects, the winter cut increased the deviations from the announced deadlines by a few more months.

If real estate market expert Irina Lukhanina comments at the beginning of winter Focus According to Lukhanina, she reported that construction delays in Kiev increased from 6 months to 1.5 years, slowdown in construction pace from six months to two years.

“Our house is currently not being built because there is a constant electrical problem and therefore the builders cannot start work normally. The sales department said the delivery is scheduled by the end of this year but if things don’t progress,” he said. 2-3 months, trust them [своевременное] It’s pointless to complete”, shared his concern from an investor of one of the new buildings in Kiev in January 2023. In March, to the delight of investors, work on this construction site resumed. Login to the lun.ua portal, 2nd quarter of 2024. Interestingly, this project is new When it started, the house in question was scheduled to enter service in the 4th quarter of 2021, that is, even before the war.

Such cases are not isolated. Because, as Irina Lukhanina explained, Since mid-October, the electricity has been cut off, and the slowdown in construction began as early as 2021, about 3-4 months before the hostilities..

But there are projects that have not moved at all since the beginning of a full-scale invasion. For example, in December, investors in the Zlagoda residential complex complained. Focus to stop building their homes. They have been waiting for the housewarming party since spring 2020. To clarify, this object, along with other unfinished buildings in bankrupt Ukrbud, was taken over by the well-known capital developer HK Kyivmiskbud.

As of now, according to the messages on the investor forums, there is no change in the construction site. Another investor of the Kyivmiskbuda residential complex said, “There is no information about the work and implementation plans since January 2022. Let’s write letters to provide clear information about the resumption of work.”

The consequences of this story could be a shift in the balance of power in the real estate market. Victoria Bereshchak, in particular, believes that in the future we will see the beginning of transformation. The real estate market and developers, which are considered leaders for their large size, and as the experience of the war year shows, an inflated portfolio that they can not cope with now will be replaced by niche development companies with a conceptual vision of the product..

Previously Focus explored how the winter blackout affected the Ukrainian economy and trade in general.