Ongoing conflict fuels real estate boom in Ukraine

Original article from CNA, by Megumi Lim

In the Kyiv suburb of Irpin, new apartment buildings are emerging amidst the remnants of the recent conflict. Two years ago, this city, located just outside Kyiv, resisted the initial stages of Russia's invasion as Moscow's forces advanced toward the Ukrainian capital. Although Ukrainian troops successfully repelled the Russian forces, the city suffered extensive damage, with about 70 percent of its infrastructure destroyed, according to the mayor.

Today, Irpin symbolizes Ukrainian resilience. Debris still litters the streets, and many structures remain damaged from the shelling, but signs of recovery are evident. Workers are busy repairing roads, restoring infrastructure, and constructing new housing.

Many of these new apartments have been bought by the thousands of civilians who fled to Irpin on foot from frontline cities under Russian attack. Among those seeking to purchase a home in Irpin is business consultant Denys Bazilevych, who relocated his family from Odesa, a southern port city experiencing frequent Russian assaults. "We face constant shelling and drone attacks in Odesa, so we moved to Kyiv for safety. It's not completely safe here either, but it's safer than Odesa," he told CNA. Since their arrival, the family has been renting but is now looking to buy an apartment.

The Bazilevych family is part of a real estate surge that has occurred in recent months, despite the ongoing war. They are among those driving the housing market in Ukraine, relocating because their previous homes have become too dangerous. Many are seeking safer neighborhoods in Kyiv and western Ukraine, away from the heavily affected eastern and southern regions.

A significant increase in property transactions has been observed. According to Ukrainian analytics firm Opendatabot, over 400,000 homes, apartments, and plots of land were sold last year, marking a 70 percent rise from the first year of the war in 2022. While this number is still below the pre-war record of over 630,000 properties sold in 2021, it indicates a growing willingness among Ukrainians to invest in real estate.

Despite the ongoing conflict, home ownership carries substantial risks. As of January this year, more than 250,000 homes and apartments have been damaged by Russian attacks, according to the Kyiv School of Economics. Nevertheless, Ukrainian law firm Prikhodko and Partners notes that 90 percent of homeowners do not insure their properties, as natural disasters are rare in Ukraine and home insurance is not a common practice. Many Ukrainians believe that Russia should be responsible for compensating damages caused by its attacks.

Looking ahead, there is hope for a brighter future. Last month, the United States Congress approved a long-awaited $61 billion aid package for Ukraine, including air defense systems, artillery rounds, armored vehicles, and anti-tank weapons.