UKRAINE Trends and Developments Contributed by: Timur Bondaryev, Maryna Sharapa, Andrii Pidhainyi and Olena Yurets, Arzinger
as a result of the armed aggression of the Rus - sian Federation. In May 2023, a special law and by-laws were adopted, which introduced a State mechanism that made it possible for citi - zens to receive compensation for damaged and destroyed housing without waiting for repara - tions. The “eRecovery” State programme enti - tles every citizen whose home was damaged to apply for State aid for ongoing repairs. Owners of destroyed housing can also submit an appli - cation for compensation for the purchase of a new apartment or house in the Diya application. The Register of Damaged and Destroyed Prop - erty was also created. It contains all data on damaged and destroyed property and makes the compensation process simpler and more convenient. UAH4.1 billion of budget funds has already been allocated for repairs, and 45,000 Ukrainian families are already rebuilding their homes (the total number of applications is more than 79,000, mostly in the Kharkiv, Kyiv, Mykolaiv and Kherson regions). More than 11,000 appli - cations were submitted for housing cost com - pensation. Some have already purchased new homes, with a total cost of more than UAH3 bil - lion. In October 2022, Ukraine also launched the government’s “eOselya” affordable lending pro - gramme. Till 2023, the programme was avail - able only to military, law enforcement, healthcare and education personnel, who could receive a preferential housing loan at a 3% interest rate for up to 20 years. However, since July 2023, the government has expanded this programme to include veterans (and their family members), internally displaced persons and, in general, all Ukrainians who do not have their own housing (or where this comprises a small area). For these categories of persons, a fixed annual loan rate of 7% applies. However, citizens can choose hous -
ing under construction only from those develop - ers that are accredited by banks participating in the programme. The war has triggered significant inflation and a depreciation of the national currency. These fac - tors affected the cost of construction, as prices for construction materials increased significant - ly. Housing prices increased by 12.8% in 2023: • one-room apartments rose in price by 14%; • two-room apartments rose in price by 11.1%; and • three-room apartments rose in price by 13.5%. The price of housing in the secondary market rose by 15.6%, which is 3.5 percentage points higher than in 2022. Nevertheless, in 2023, Ukrainians bought 404,000 real estate proper - ties, which is 1.7 times more than a year earlier. However, this is still 1.6 times less than before the start of the full-scale invasion (631,000). Lease relations 2023 could be called the year of gradual recov - ery, with some residents returning to Ukraine. In many cities, curfews were reduced, and most markets that were closed at the beginning of the war reopened their doors to visitors. The con - cessions the landlords were forced to make at the start of the full-scale invasion were reviewed in 2023. Rental rates for commercial property began to return to market rates. The number of housing rental ads in Ukraine decreased from December 2022 to December 2023, in almost all regions. According to statis - tics, the average rent price increased (for exam - ple, the cost of renting a one-room apartment in Kyiv increased by 48%).
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