Revenues of local budgets from the sale of agricultural land increased by 15% in May. The average cost of a hectare in Ukraine reached UAH 43,582. This is the highest indicator since the opening of the land market (July 1, 2021).
From the beginning of 2024, land can be purchased not only by individuals, but also by legal entities. This became one of the reasons for the increase in demand, and therefore the cost of land.
“Given the slight decrease in prices in April 2024, the increase in the value of agricultural land in May of this year can hardly be considered a long-term trend. However, it is worth noting that since the beginning of 2024, average land prices have remained significantly higher than in previous periods. Therefore, it can be stated , that the opening of the land market for legal entities in January 2024 caused structural changes in market conditions, and as a result led to an increase in the value of agricultural land” – notes Roman Neuter, head of the “Land of Invincibility” project from the Kyiv School of Economics (KSE).
About 9,000 plots were sold during the month. Another 20,000 shares were inherited by Ukrainians, and lease agreements were drawn up for 25,000 plots.
After a significant increase in the number of leases concluded in April, when almost 32 thousand contracts were signed, in May their number returned to the average level of the first quarter of 2024. In total, in May 2024, 25,000 agricultural land lease agreements with a total area of 62,800 hectares were concluded, which is three times the area of sold land (19,500 hectares).
The area of plots purchased by legal entities in 2024 is unevenly distributed across regions: 26% of the total area is in the Poltava region. The front-line Dnipropetrovsk (11%) and Sumy (8%) oblasts are also among the three leaders in terms of the area of plots purchased by legal entities. No plots were purchased in only two regions of Ukraine that are under occupation – Luhansk Oblast and Crimean Autonomous Republic.
According to the updated data, in May 2024, 619 successful land auctions were held for a total area of 5,000 hectares. This is 10% more than the number of successful bids and 15% more than the total area of successful auctions on the Prozorro platform. Sales in April this year. The weighted average rental price at land auctions in May was 8.8 thousand hryvnias per hectare, which corresponds to the average value of the first quarter of this year.
“Since the beginning of 2024, as of the end of April, more than UAH 14 billion of tax revenues related to the circulation and use of agricultural land have been received by communities, which is 21% higher than the same value for 2023. In the first four months of 2024, the share of these revenues in total tax revenues of communities increased from 12% to 15%. Therefore, the agricultural land market is becoming more and more important for maintaining financial capacity at the local level.” – experts of the Kyiv School of Economics report.
