THE GROWING APPEAL OF HISTORIC CENTRAL KYIV
Ukrainians have typically favored new properties but attitudes are changing amid gentrification. For many years, it was an unwritten rule in the Ukrainian real estate business that newer meant better. However, it is now becoming increasingly clear that the property market in central Kyiv is following the same gentrification trend seen in many other historic districts throughout Europe and the United States.
Sean Almeida is CEO & founder of Vestor.Estate real estate company. Working over 8 years in the real estate market of Ukraine, he shared his thoughts and experience about the historic center of Kyiv and its real estate market situation.
Several years ago, it was very hard to find any local with means who was interested in living in the heart of Kyiv. Instead, they would typically voice complaints about safety, dilapidated entrances, odorous lifts, leaky pipes, and other inconveniences. Back then, real estate in the center of the Ukrainian capital was primarily of interest to the expat community. This was particularly the case among European expats, who often insisted on renting or buying in undervalued downtown buildings.
Whereas locals saw lousy buildings that reminded them of their Soviet youth or the hardships of the early post-Soviet years, Europeans were amazed that such treasures were hiding in plain sight. Based on their own personal experience of cities like Vienna and Paris, these European expats tended to regard buildings with four-meter ceilings, grand staircases, and elaborate facades as being way out of reach for all but the mega-rich. Consequently, they were more inclined to tolerate things like dirty entrances and older lifts, considering it a small price to pay as long as the apartment itself was clean and spacious.
While Ukraine’s expats were coveting apartments in older buildings, locals with money to spend were typically buying and renting in the shiniest new buildings they could find, even if this meant moving some distance from the city center. However, in recent years there have been growing indications that local attitudes towards real estate are moving closer to expat perspectives.
One reason is unreliable developers. Many new buildings take far longer than promised to finish, while there have been instances of developers going bankrupt with multiple properties under construction. Meanwhile, many Kyiv residential buildings that were new just a decade ago now look old and stale. There are also infrastructure issues, with some new residential buildings lacking parking spaces and other basic conveniences.
Additionally, new buildings are often built in clusters that not only ruin views for most inhabitants but also suppress future sale prices by constantly increasing supply. In contrast, the supply of properties in the historical center of Kyiv is almost static, making them a better investment.
Kyiv itself is changing. Traffic congestion is getting worse every year, meaning that someone who initially anticipated a daily commute of 45 minutes may now find themselves spending twice as long in the car every day. This is a very persuasive argument for considering downtown locations.
There are also signs that attitudes are shifting. A new generation of younger Ukrainians with no real ties to the Soviet past is now beginning to make an impact on the Kyiv real estate market. They are less likely to share the early post-Soviet obsession with newness that guided older generations of Ukrainians. Instead, they tend to value the charm and convenient location of older properties in the historic center of Kyiv.
While skeptics of this trend remain, one only needs to think about every other historical center in Europe and ask if any of them are as rundown and filled with dilapidated apartments as today’s Kyiv. When living in Moscow more than eight years ago, I also heard that Muscovites didn’t like the city center for all the same reasons cited above, but now a friend who lives there with his family tells me that his office is around the corner from his apartment, and along the way, he can drop his kids off at school. Throw in some supermarkets and decent eateries, and you could even imagine these urban elites even foregoing ownership of cars, which was unthinkable several years ago.
Experience on the ground indicates a steadily growing demand for downtown Kyiv properties. Over the past year, we have been approached by numerous local clients who were desperate to buy something in prime locations in the heart of Kyiv such as Yaroslaviv Val and Reitarska. After not finding enough supply on the sales market, they would even call around to rental places and ask if the owners would consider selling.
One such client made an offer to buy a renovated four-bedroom place for USD 4000 per square meter, while the owner had bought the place the year before at USD 1800 per square meter. In the end, the owner refused to sell, knowing that he was unlikely to find another great deal in a similar location, and confident that any future price would be even higher.
The current global pandemic might put a pause on such extravagant offers for now, but this trend will only accelerate in the years ahead. The center of Kyiv currently seeing makeovers of many streets with new bike paths, freshly planted trees, and cars being prevented from taking over sidewalks. This gentrification is transforming the historical center of the Ukrainian capital and providing a higher quality of life to its residents, with inevitable consequences for the real estate market. To ensure this, watch the video we filmed about the very heart of Kyiv!