• Residential Housing Market
• Commercial real estate market
• Hotel real estate market
• Office real estate market

Residential Housing Market

Supply at the residential housing market
The residential housing market in Kharkov demonstrated considerable rates of development in 2007, at the same time preserving all tendencies inherent to it in the recent years.
The total residential housing resources in Kharkov make about 30 million sq.m.
In the beginning of 2008 each resident of Kharkov accounted for 20.9 sq.m. of living space, while the average index of living space throughout the country is 21.8 sq.m.
The index of provision of housing to people residing in Kharkov and in the country as a whole is one of the lowest among those of the countries of Eastern Europe.

This fact provides a basis for further escalation of prices that in turn enhances the attractiveness of investment into this segment of the real estate market of the city.

The market potential is high enough. New buildings are constructed actively.  
Thus, in 2007 around 29 residential houses were put into operation that is by 16% more compared to the previous year.
The target dates for commissioning of other 7 houses were shifted to the beginning of 2008.
The dynamics of commissioning of new buildings in Kharkov in 2002-2007 is represented in Fig.1.
Today the market of primary residential apartments in Kharkov is at the formation stage

Сегодня рынок первичного жилья Харькова находится на этапе формирования.

Fig.2. Structure of primary residential market in Kharkov

New buildings constructed in the city belong mainly to the “business” and “economy” class. Position of “premium” class projects is insignificant, and apartments of “de luxe” class are not represented at the market in Kharkov at all (Fig.2).

Description of classes and objects of different classes, under construction in Kharkov, is given in Table 2.

Table 2. Typical representatives of the class

Market volume is increasing exceptionally due to infill construction. By this moment projects of complex development have not been realized in Kharkov. Among large-scale projects it is worth to point out the project of construction of residential complex “Pavlovka Riverside Park”. The developer of this project is the “MCDU” company. Realization period of construction stages of the multifunctional project “Pavlovka Riverside Park” is 2007- 2012. This project was approved in autumn 2007 by the City-Planning Council of Kharkov.
In 2007 the company “Consol” declared about construction of a multifunctional residential complex at the territory of 10 hectares called “Consol Green City”.
The company “XXI century Kharkov” declared about construction of a residential complex “Golden sands”. Total area of the complex is 920 thousand sq.m. The complex will be constructed at the area occupying 36.8 hectares.   Under the project, creation of the infrastructure is considered, in particular, construction of a school, a kinder-garden, a sports-and-health center and other objects for socio-cultural purposes. Construction of the complex will be conducted in four stages and will take no less than five years. Commissioning of the first stage is planned on 2011.

Demand at the housing market

The aggregate deficit at the housing market in Kharkov makes about 14 mln. sq.m., and taking into consideration the specific index of shabby residential buildings in the volume of current housing resources, the gap between the demand on and the supply of living space is estimated at the level of 18mln. sq.m.
The principal reasons of steady growing demand at the market of primary residential apartments areincrease in trust to stable construction companies;

• wear of secondary housing resources in Kharkov;
• disparity of  qualitative characteristics of secondary market of housing resources as compared to the new residential apartments under construction;
• attractiveness of real estate acquisition as a means of capital investment.

Apartments of “business” and “economy” class are enjoying the greatest demand at the primary housing market.
Traditionally the most attractive to the buyers are districts close to the centre of the city and districts with good transport interchange and close to underground stations, such as:, Alekseevskiy district, Saltovskiy district, Pavlovo Pole district; Nagornuy district; “Gosprom” underground station, “Nauchnaya” underground station, “Gagarina” underground station, “Ploshad Vostaniya” underground station.
The index of effective demand has been growing annually, among the basic factors influencing the growth are positive dynamics of the income level of the city residents and development of mortgage crediting. Today banks offer to clients the service of mortgage crediting of exchanges. Under competition conditions banks expand their mortgage programs and extend their services. The activity of banks is not diminishing. Rates have been going down lately, and many banks in the fight for clients introduce the service of refunding. On the other hand the amount of credits is increasing.
Expansion of credit possibilities for acquisition of real estate in Kharkov enhances the number of potential buyers.
It is worth to point out that at the moment about 60% of all transactions are made through credit pattern.

Price indexes at the housing market
During last years a steady tendency in increase of the cost of 1 sq.m. of living space has been noted at the primary housing market in Kharkov

Fig.4. Dynamics of price indexes at the primary housing market in Kharkov

Thus, in 2006 the average annual rate of growth was 24%, while in 2007 this index was noted at the level of 49%.

Cost of residential apartments at the primary housing market

In a short-term prospective a positive dynamics of price indexes is predicted at the level of 25-35% annually.

Tendencies at the housing market
The following tendencies should be noted at the housing market:

• the number of the new houses being put into operation is increasing, which tells about a positive dynamics in the market development;
• supply of residential apartments in new “business” class buildings is increasing (unlike 2006, when “economy” class apartments were prevailing);
• in greatest demand at the primary housing market are single-room and double room apartments, and apartments of  “economy” and “business” class
• at present there is construction of new houses in central areas of the city, at Pavlovo Pole district, Gagarin Av., Kholodnaya Gora district , Alekseevskiy district, Saltovskiy district;
• new projects of territories development is under way;
• among factors which influenced the advance of prices, except for prevalence of demand over supply, it is also worth to mention the increase of the Gross Domestic Product (GDP) and income of population. In addition, a possibility to obtain a mortgage credit became another plus in acquisition of apartments ;