Luxury housing during wartime: how the premium market is gradually emerging from a long crisis

The premium segment of the Ukrainian real estate market, which practically stopped with the beginning of the full-scale invasion of Russia, is now beginning to show signs of recovery. After a deep decline in 2022 and subsequent three-year stagnation, the highest class of housing is starting to attract investors again. From February 24, 2022, the situation in the luxury real estate market has changed dramatically. At the beginning of the war, it suffered a sharp decline, which was replaced by a period of complete calm. Many developers deliberately withdrew objects from sale or temporarily stopped the implementation of projects, not wanting to sell the most expensive apartments at discounted prices.

Market analysts emphasize, that during the active phase of the war there cannot be a stable demand for luxury housing. However, now the situation has started to change. The first signs of activation of this segment were recorded last year — in Kyiv and Lviv there was a revival of interest in luxury residential real estate. For the first time during the war, a new premium-class development project appeared in the capital — The One residential complex, located on Mechnikova Street, which was brought to the market by the DIM group of companies.

This facility differs from pre-war projects: it provides apartments with hotel service, as well as a 138-square-meter penthouse with a panoramic view of the center of the capital. The company emphasized: the results of the closed pre-sale proved that investors are ready to invest money already at the excavation stage, if they see the conceptuality, engineering innovations and uniqueness of the project.

As Arseniy Nasikovskyi, a junior partner of DIM, reported, almost 30% of the apartments in this residential complex were sold within a few months. According to him, this proves that investors remain on the market and they value exclusivity, they are looking for not just housing, but attractive objects for investment. In fact, we are talking about a balanced study of demand and, at the same time, a bold attempt to start a new premium project in conditions where no similar project has appeared in this segment since 2022.

According to Roman Gerasymchuk, CEO of City Development Solutions, during the war there was a shortage of interesting new projects in the luxury prime real estate segment. Among those that can be considered premium on the primary market of Kyiv, he named Signature residential complexes, unfinished Nver from Taryan Group and several other objects.

Before the start of full-scale war, investments in such complexes as Triiinity gave the opportunity to receive a return (ROI) of up to 60%. These data suggest that the market, which is only beginning to recover today, was once very profitable.

In addition, the developers confirm that the primary market for luxury housing in Kyiv today is more alive than dead. The main sales dynamics are concentrated in the “comfort” and “comfort plus” categories, which is quite logical in the current war situation. Iryna Mikhaleva, marketing director of Alliance Novobud, in a comment for Delo.ua noted: in the premium segment, sales do not happen as often as in mass housing, and announcements of new projects are even rarer. But those buyers who do enter the market think strategically, taking into account the long-term perspective.

In her company, the Montreal House project is significantly supported by foreign buyers. They invest in business and premium class housing, focusing on long-term leases and capitalization opportunities. According to Mikhaleva, the current owners often buy additional parking spaces, which indicates a desire to gain a foothold — over time, they start repair work in already rented facilities.

Modern requirements of buyers of premium real estate provide for mandatory security: the presence of underground parking lots, backup power sources, quality materials, air and water filtration. At the same time, the general concept, location, architectural solutions, level of service, prestige and infrastructure do not lose their importance: fitness, SPA areas, restaurants, energy efficiency, landscaping.

However, despite the revival, the market remains niche. According to Gerasymchuk, in contrast to the pre-war period, demand is not so active now that we can talk about a full recovery of the capital’s premium market. Kyiv’s luxury housing segment is currently facing new competition — apart-hotels like those being built in Bukovel. There, investors are offered service, management, transparent profitability and special applications that transfer $1000-2000 once a quarter. According to Gerasymchuk, currently investing in ski resort real estate is more rational than buying capital penthouses. The investor seeks profitability: capital objects are more difficult to resell, their maintenance is more expensive, and the tax burden is higher.

Thus, the developers predict: when Kyiv returns to the active development of the premium segment, it will be a different product — rather, according to the model of income real estate, as in the Carpathians.

Expert Iryna Lukhanina believes that demand in Kyiv has currently decreased by 7-8 times compared to pre-war times. The main focus is on long-term lease. Sales are concentrated in the most liquid areas. The volume of transactions is consistently low: from 0.7 to 1.8% of the total volume of transactions. The owners are in no hurry to sell — this limits the choice for buyers. In the secondary market, agreements are concluded in residential apartments, which were handed over in 2020–2021. During the three years of the war, prices fell by 30%. The primary market, on the other hand, recovered.

At the same time, Gerasimchuk recalled: before the war, investors invested in premium-class properties with an expected ROI of up to 60%. The price started from $3,000 to $6,000 per square meter. Today, the starting prices are from $300,000 per apartment. There are also paradoxical examples on the market – in “Novopecherskyi Lypki” sometimes there are objects with repairs for $2,000 per “square”, although before the war such offers started at $4,000-5,000 without repairs. Currently, a premium square meter costs an average of $2,500-4,000, depending on the location, floor, view from the window, class of the object. Bargaining — up to 5–10%, sometimes up to 30%. Expected price growth in 2025 — from 7 to 12%, primarily for objects with a high level of readiness and a formed ecosystem.

Along with this, experts note that the demand for long-term rental is growing. Investors receive 5–7% per annum. Apartments with ready repairs pay off faster, as they are immediately rented out. Among the buyers are Ukrainian entrepreneurs, owners of IT companies, and public figures. Despite the war, the demand for penthouses, apartments in club houses, objects with designer repairs and furniture does not disappear. The most actively bought in the Pechersk district: Residential complex “Novopecherski Lypky”, INTERGAL CITY, Taryan Towers, Skyline. The Holosiivskyi and Obolonskyi districts are also popular: the first – due to green areas and silence, the second – due to the proximity to the water and the image of a business location.