The cost of agricultural land in Ukraine will increase by 15–20% in the coming years: Ihor Lysetskyi
Against the background of the continuation of reforms and the gradual recovery of the economy in Ukraine, more and more experts expect an increase in prices for agricultural land. Despite the war and the general state of uncertainty, the market remains alive and even shows signs of stabilization, albeit uneven. In this context, the opinions of experts become important for understanding deep processes. One of these specialists is Ihor Lysetsky, an expert on land issues, coordinator of the Land Committee of the Ukrainian Club of Agrarian Business (UKAB), who shared his assessment of the state and future prospects of the land market.
Ihor Lysetsky noted that in the coming years, under a positive scenario, land prices in Ukraine will increase by 15-20%. Such a scenario is possible only in the case of stabilization of the economy, preservation of the macroeconomic balance and continuation of reforms. He emphasized that growth is possible only if the investment climate in the country improves. In the opposite case, i.e. with the continuation of high uncertainty, large-scale destruction of the agricultural sector and instability of the hryvnia, we should expect stagnation or a slight rise in prices within the limits of inflation.
The expert emphasized that the war is currently the key restraining factor, which affects not only the dynamics of prices, but also the activity of all market participants — both sellers and potential buyers. According to Lysetskyi, it is impossible to expect a massive increase in prices while hostilities continue in the country, the situation at the front changes every day, and agricultural producers work in extremely risky conditions.
He said that during the three years of market operation, about 3% of the total amount of agricultural land was sold. Such an indicator is quite expected and should not cause concern. Lysetskyi explained that similar dynamics are characteristic of countries that are just beginning to open the market — and Ukraine is no exception. He recalled that at the start of the full-scale invasion in 2022, the work of key institutions almost completely stopped – the State Geocadastre register, the state register of real property rights to immovable property, as well as the register of ownership rights to immovable property did not work. As a result, any deals became temporarily impossible, which explains the slump in the sales schedule during that period.
Ihor Lysetsky believes that the greatest activity on the land market, as he said, is currently observed in the central regions of Ukraine. This is explained by several factors: the most fertile soils, the largest massifs of arable land and the highest level of agricultural production are concentrated in this region. In addition, in the central regions, according to him, a significant number of hectares is often in the hands of one owner, which simplifies the sale process. In contrast, in western Ukraine, although prices are also quite high, the average size of one share is much smaller. This makes it difficult to consolidate land and makes it less attractive for large agricultural companies interested in large areas.
Lysetsky also explained in detail what factors affect the price of agricultural land today. First of all, this is an offer. A significant part of the owners who wanted to sell the land already did so immediately after the opening of the market. However, the other part is still waiting for a more profitable moment. According to him, many people already fix the desired price and are ready to sell only when the buyer agrees to their terms. Thus, a peculiar stratum of owners has formed on the market, who take a position of waiting and do not create an excess of supply.
He called demand the second important factor. The expert believes that there is currently no excessive demand, excitement or attempts to buy up large land banks. A balanced, cautious strategy prevails among farmers and investors. This is due to two reasons: first, large deals require significant funds, and investment resources are in short supply today; secondly, in wartime land is not a liquid asset, because its use is limited by risks, and the outlook is uncertain.
Another factor complicating the price dynamics was the economic situation in the country, in particular, the devaluation of the hryvnia, the coordinator of the land committee of UKAB called. According to him, in conditions where the national currency depreciates, the value of land in dollar or euro equivalent becomes less predictable. This deters foreign investors and makes long-term planning difficult. At the same time, as Lysetsky emphasized, if the state can ensure the stability of the exchange rate, activate financing of the agricultural sector and restore trust in institutions, the land market will receive a new impetus.
Summing up, he expressed his conviction that Ukraine has significant potential in the field of agricultural land turnover. However, the realization of this potential is possible only under the condition of purposeful state policy, restoration of infrastructure, stabilization of the economy and cessation of hostilities. Then the land can really turn into a strategic asset that not only attracts investors, but also contributes to the development of the Ukrainian countryside, the modernization of agricultural production, and the growth of GDP.
