REAL ESTATE MARKET IN UKRAINE: TRENDS OF DEVELOPMENT AND CHALLENGES

Abstract

The development of the real estate market in Ukraine has a positive impact on the economy, contributes to the activation of the banking sector, investment and employment growth, and improvement of living conditions, which, in turn, alleviates social problems. The aim of the article is to study the components of the development of the real estate market in Ukraine. In the course of the work, various general scientific and special research methods were applied, including inductive and deductive methods used to analyze the construction output, GDP, and the consumer price index. With the help of economic analysis and comparison, an analysis of interest rates on deposits in hryvnia and foreign currency for 2005-2020 was carried out. The method of correlation-regression analysis was used to study the relationships between the main influencing factors and the resultant factor (the volume of Ukraine’s real estate market). The graphical method was used to visually represent the results of the study. The abstract-logical method was used for theoretical generalizations and drawing conclusions. The authors analyzed the real estate market in Ukraine and revealed a trend of growth in its capacity in value terms during 2010-2019 and a decrease in 2020 compared to the previous year. To forecast the capacity of this market, it is important to identify the determinants that affect its development. A multiple regression linear econometric model was used to quantitatively assess the impact of different factors on the development of Ukraine’s real estate market. The construction output (residential buildings) in value terms was taken as a resultant factor. Consumer income, housing investment, and divorce rate were taken as factors influencing it. Based on research, it was found that from 2005 to 2020 consumer income increased by 3.6 times, and in 2020 by 6.1%. This is one of the indicators among the respondents, which had a positive trend over the past year. According to the results of research for 2019-2020, investments in housing construction, the number of divorces, and interest rates on mortgage loans in UAH for 2020 decreased by 39.9%, 13.2%, and 0.6 points respectively. Examining these indicators for 2005-2020, we can say that only the number of divorces decreased by 5%. All other indicators increased: interest rates on mortgage loans — by 18.2%, consumer incomes — by 35.5%, and the construction output (residential buildings) — by 4 times. Based on the coefficient of determination, F-test, and von Neumann criterion, it was established that the constructed multiple econometric models are adequate for the statistical data of the population and can be used for further analysis of the economic process. To study the influence of factors on the construction output, partial coefficients of elasticity were analyzed. Based on the performed calculations, it was found that the development of the real estate market in Ukraine is primarily influenced by an increase in consumer income and their investments in residential construction, with a 1% increase leading to a 1.008% and 0.248% increase, respectively, in the construction output (residential buildings) in the real estate market of Ukraine. However, the conditions of the war, the decrease in the income level of the Ukrainian population, decrease in the real estate investments, and the destruction of a significant number of residential and non-residential premises have had a negative impact on the studied market. Its activation is expected in the post-war period — the period of restoration of Ukraine.