Kyiv Real Estate: More Boom - or a Bursting Bubble Ahead?
 Kyiv is currently enjoying what is probably the greatest boom in building construction in its history with over a million new housing units coming on line every year. However, there are naysayers who suggest that Kyiv's housing boom could become a bubble with possibly disastrous results. Naturally, we turned to some of the sages among our readers for answers.
Specifically, we asked:
 How does one consider the real estate situation in Ukraine anything but classic? Are interest rates conducive to individuals investing in real estate? Certainly not anywhere near the rates enjoyed in North America. The main reason I bought back in mid-2005 was that it was the right time and I was looking at substantial price escalation. As anywhere in the world, there are real estate speculators and one would suspect that there are more of them at work here in Ukraine. However, there is also a demand from the younger, upwardly mobile middle class. In summary, I'm not sure anyone can really tell you if and when the bubble will burst.
Victor Koszarny
EBS, Mgr. Business Development
Interviewed at Baboon Cafe
In Ukraine seven years.
 The current situation is a classic example of a transition economy's experience, as has happened elsewhere and particularly in central and Eastern Europe. I am not sure we can speak of a bubble per se, as is typically the expression in the West. Prices have gone up because of a number of reasons, most of which are based on
a new economic regime and a potential for growth and overall economic prosperity. In that general context, and more specifically in Kyiv and certain large cities of Ukraine, real estate prices have been going up because of a shortage of good space [both residential and commercial], availability of savings and hence of purchasers willing to pay, ability to obtain mortgage money more easily [albeit at a premium rate], and
a brinkmanship approach to the market by developers and sellers. In any event, as the market for development in the center of big cities will simply be saturated, new development will take place outside of the city centers and in the "new suburban" based centers.
Petro Morgos,
Legal Counsel, Sayenko Kharenko
Interviewed at Walter's Restaurant
In Ukraine almost ten years.
 The prices are mainly due to speculation fueled by cheap loans by a banking system giving unsecured loans to dubious investors. Recent news of Russian bank loans being three times more than the previous year has raised doubts about the Russian banking system being vulnerable to bad loan debt. When those banks begin to default and loans need to be repaid, this will have a ripple effect in Ukraine as a mirror situation to that in Russia. Estimates for this to happen - in two to three months. Local Ukrainian interests may try to prevent
a collapse, but due to political infighting, ineptitude, etc. and learning the old adage that you cannot buck the market, the property bubble will go - bang!
Peter Flanigan
Self-employed
Interviewed at O'Brien's Pub
In Ukraine 14 years.
 The market of high-rise elite is very overheated, driven by local speculators resulting in a high percentage of stock being held unoccupied. Primary market purchases tend to be pre-sales which, almost without exception means failed delivery dates. Whilst the market has been rising, this has not been an issue as purchasers have been relaxed as capital appreciation of acquired rights have risen at a rate in excess of the cost of finance. This has also enabled developers to slow time delivery so as for them to take full advantage of the rising market through holding off some sales until later in the delivery program.
In short, the longer they have delayed completion, then the better their returns from development. If the market plateaus or falls, then obviously purchasers will not be prepared to accept delays and this could lead to a loss of confidence in the residential market. Given that the market is generally unleveraged (compared to the more established/more mature economies) the likelihood of a bubble bursting is less likely, as investors would find themselves in a negative equity situation, as was common in the UK during the late 1980s and early 1990s. More likely we may see a period of extended illiquidity and stagnation.
There are, however, areas of the residential industry still structurally undersupplied. One such sector is the cottage housing supply that remains very low and is seen as an area of significant unmet capacity.
Nick Cotton
Mng Director, DTZ (Zadelhoff Tie Leung)
Interviewed at the Baboon Cafe
In Ukraine over eight years.
 Neither. It is an artificial market that bares no reflection to any supply and demand, as we know it in a true market in the West. Since it is an artificial market,
I do not see any decrease in real estate prices that are significant. So how can the average Ukrainian live the Ukrainian dream and own his own apartment? If you are the average Ukrainian, you cannot. This is the real tragedy of the real estate boom in Kyiv.
I love Ukraine and I am proud to call it my new home. However, it breaks my heart how the average Ukrainian struggles and cannot achieve the quality of life that is due him or her.
Brett Ousley
Owner, Kyiv Connections
Interviewed at O'Brien's Pub
In Ukraine almost six years.
 Yes, I think the Kyiv real estate market is experiencing a property bubble. The question is, what will cause the bubble to burst? Both Ukraine's economy and the world economy look strong so perhaps it will be when the Ukraine stock market is increasing by eight percent per month and people decide to switch investments.
Philip Smith
Accountant, BR Ltd.
Interviewed at O'Brien's Pub
In Ukraine 13 years.
 I think the bubble is artificial with companies selling to other companies and it must eventually have a correction. People cannot afford to buy homes and in some cases even rent. I would predict that there will either be a small correction in the next six months or a large one within a year.
Jonathan Lichtman
IMS Team Leader, Miratech
Interviewed at Cupidon
In Ukraine seven months.
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