Kyiv will host a land conference-practicum “Investments to the Land: The Practical Blueprints of Acquisition of Rights and Speculations on the Land Market.” Liga.net has published its interview with one of conference-speakers, a Chief of Vega Consulting Co, Victor Kobylyansky.
Q: Is there a land market in Ukraine? As far as the limits imposed by the transition statements of the Land Code of Ukraine are still running and the draft bill on the Land Market is still only a draft, so what a land market we may talk about?
A: Never mind the draft bill is still a project, here is the land market long ago and it is developing very fats. The limits result in moving of a significant part of the market to “grey” schemes and influence the land prices.
Q: Do you mean the agrarian lands?
A: And them as well. I state that it is possible legally to purchase the lands of the agricultural functions, the commodity agricultural production included. It extends over approximately all lands. The blueprints of its acquisition (tested ones and newas well) will be the main topic of the discussion at the conference.
Q: Well, it is possible to buy a land. But why and who will do it? The question is not about the lots for construction in Kyiv or a sea-shore, but the agricultural lands.
A: Yes, it will take too long time before the agricultural land will be bought for the agricultural purposes. Actually, speculators form a real market of it. They buy land to change the end use or to build an apartment block. The apartment prices push the land market in this direction.
Q: How commonly used are the land speculations? In case if they are profitable…
A: They are more than just profitable. The thing is the profit is estimated at hundreds of per cents. Only lazybones is not engaged in the land market. Of course, it is an exaggeration, but this exaggeration demonstrates a tendency.
Q: So, what are the factors restraining the development of the speculative market?
A: There are several of them. The first one is money. Banks reluctantly give a credit for such deal. By the way, they are right as lots of “projects” are, frankly speaking, illegal. Secondly, it is liquidity. The land lot is not an easy thing to be sold out – it cannot take a couple of days. You may get real profitability to sell it only in a year. Lots of businessmen prefer not to freeze means for such a long period. The third and probably the main ones are risks. The local and executive authorities are studying to implement the new mechanisms of land market management too fast. So, lots of speculators may loose everything right now. The denial to change the end use and even confiscation of the lots are the most dangerous consequences of it. And if we cannot influence bargain profitability or liquidity of the land as an article of trade, then to reduce the risks is real. The coming conference will address this question.
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