Construction companies claim that every fifth buyer of an apartment has stopped paying installments, and if the situation does not return to normal after the war, then part of the future residential real estate will change owners, and construction will slow down. Writes about it “Economic Truth”.

On the one hand, the interviewed representatives of companies convince that the insolvency of every fifth investor will not become a factor in potential bankruptcies of developers.

Read also: Real estate market: the fall in prices will be staggering, and recovery can be expected quickly

Even before the war, we worked according to the principle: we build as many facilities as we can finance from our own reserveswithout relying on private investors. Accordingly, even in the absence of payments under installment agreements, we will continue to work,” said Anna Laevskaya, Commercial Director of Intergal-Stroy.

At the same time, she stressed that after the victory of Ukraine in the war and the lifting of martial law buyers will have to renew payments or risk losing their home.

“It is in the interests of clients to make contributions so that the debt to the company is gradually reduced. If not, then the investor risks losing the object. Of course, the money paid will be returned to him, but will he be able to purchase an object of the same size and other characteristics in the new market realities? Not “, – the top manager is sure.

According to Intergal-Stroy, the average amount of debt among apartment buyers is $12,000, but there are agreements where investors owe $50,000 to $70,000.

On an individual basis, we will determine new payment terms, but it won’t be years. Clients need to understand this. “, Laevskaya sums up.

On the other hand, companies admit that they still rely on investors’ fundsbecause they are included in the economic and financial estimates of construction.

Read also: The real estate market will undergo dramatic changes: five factors that will lead to a collapse

Chronic non-payment under installment purchase agreements can slow down construction worksays Igor Kushnir, president of the holding company Kievgorstroy.

In 2022, almost everyone forgot about investments. Panic, the uncertainty of the country’s future, and the threat to life brought economic life to a halt. In the first months of the great war, the demand for new apartments collapsed by 90%.

Developers have lost not only private investment. Some Ukrainians stopped paying installment payments, and developers stopped construction work.

The share of investors who cannot pay their debts has grown significantly against the backdrop of a 25% depreciation of the official hryvnia exchange rate and rising unemployment.

In May-June, no more than half of the investors paid in installments, says Andrey Levin, head of the Valprim asset management company. This financial organization accumulates investors’ funds and finances the construction of Stepan Chernovetsky’s projects under the Futura Hata brand. Although the number of insolvent investors is gradually decreasing and has stabilized at 15%, Levin adds.

Read also: Real estate in Kyiv has fallen in price up to 50 percent, the primary market has practically stopped

The same figure is voiced by the owner of KAN Development Igor Nikonov.

In “Intergal-stroy” 20% of investors do not pay installments. Some of Intergal-Stroy’s investors do not make monthly payments in full.

Another top manager of a large Kyiv development company, on condition of anonymity, said that among his projects it is not possible to pay installments for 25% of apartment buyers.

The lowest percentage of insolvent investors belongs to the holding company Kievmiskstroy. Its president, Igor Kushnir, says that regular payments are not received from the signatories of 5% of contracts concluded on the terms of installment payments.

The publication recalls that in 2014-2019 there was a construction boom in the largest Ukrainian cities. The triple devaluation of the hryvnia, low construction costs and migration processes have increased the demand for housing by hundreds of percent.

Read also: Developers in Kyiv go for desperate discounts for real buyers: apartments in new buildings are sold at two prices

On the wave of optimism, developers launched new projects, not having time to complete the old ones.

And since bank lending has fallen to almost zero, developers have begun to give flexible terms for installment payments for apartment buyers.

However, in 2019, the hryvnia exchange rate against the dollar strengthened sharply. Apartments in dollar terms have risen in price, which is why there are fewer buyers.

In 2020, the coronavirus pandemic began, so there were even fewer investors in housing construction.

Such tests have not passed the flagships of the construction industry: “XXI century”, TMM, “Capital”, “Ukrbud development”, “Arcade”.

At the same time, we recall that experts believe that, for example, real estate in the capital region will not be in demand for another 5-10 years. And this will add factors that will lead to price reductions of up to 30%.

Moreover, as I wrote ZN.UA, one should not expect much revival in the mortgage market. In fact, for a bank that lends money for the purchase of real estate, a guarantee for the completion of the facility and the protection of the buyer’s property rights are the main requirements. Read about it in the article Alexander Boltyan“Will the new requirements fundamentally change the real estate market?”.

Experts also warn that demand will now depend on residents’ assessment of the reliability and safety of housing. About this in his material for ZN.UA “Real Estate Market: Falling prices will be amazing” write Ludmila Simonova and Sergei Sledz.

Also, it should be remembered that the real estate market is undergoing changes not only in Ukraine. Old and substandard properties are facing particularly difficult times around the world. It is expected that the global real estate market will fall significantly, and prices for illiquid properties will decrease. This is due to the global economy, which is experiencing constant turmoil.