Many experts say that the economic situation in Ukraine remains unclear. However, there is a number of positive signs, including stable hryvnia rate and improvement of balance of payments. Growing demand for new residential real estate, registered in the first half year, is also considered a good sign of development. Thus, in Kyiv, the biggest regional market, there were 5934 new apartments sold in the first half year of 2013 against 4837 apartments in January-June period of 2012.

The most popular are two-room apartments (47% of deals) and one-room apartments (41%). As for prices, 60% of deals accrue to apartments under $100 thousand, 25% - between $100 thousand and $200 thousand. Desnyanski district with average index of $1411 per square meter in a new apartment is considered the cheapest, and Pecherski ($2593/m2) - the most expensive.

Among the reasons of growing demand for new buildings, experts note smart policy of site developers.  According to Serhiy Kostetski, leading specialist of the marketing department of SV Development company, consumers are mostly interested in economy class residential property - 40-60 m2 one- or two-room apartments. Prices for new apartments have not changed much in recent years comparing to secondary residential real estate. Thus, 1m2 in a new building at the stage of laying of the foundation is up to 30% less than in a secondary residential property, Kostetski says.

Moreover, real estate builders actively develop suburbs and satellite towns, Georgiy Yasinski, a partner of the consulting company Homeland Estate, specifies. In suburbs the demand for economy class dwelling is higher than in the capital, as 1m2 is 2-3 thousand hryvnias cheaper there.
Buying an apartment is a deal for many years, if not for life, and to make the right choice estate agents recommend to study thoroughly the documents you sing with real estate developers.

Read the contract

The major part of contracts provide for maximum obligations and responsibilities for the investor, but minimum for the developer. In general, buyers should pay close attention to obligations of the developer:  object of investment,  terms of construction, proprietary rights handling procedures, etc. The investor should also study other obligations apart from timely payment. Experts point out that the documents often stipulate exact term of submission of works, but in practice, the terms get prolonged, not even once, and investors should always inquire the reason of prolongation, follow the process of works and compare the information of the developer with the information of state agencies.

For example, investment is made through purchase of special-purpose bonds, and the contract provide for the investor to cash in the bonds and deliver them to the developer to get the proprietary rights. In practice, however, investors often only cash in the bonds and then sit and wait for the developer to complete proprietary rights handling procedures. At the same time, the contract may specify that the investor must transfer the bonds to the account of the developer in securities and to prove the operation with the statement of account in securities. However, regular Ukrainians do not read the contract and do not even know what the statement of account in securities means, Kostetski complains. 

Among the most deplorable moments for investors buying a real estate by installment there is the price issue. Many developers do not fix the price of apartment at the initial stage and change it with the development of the construction. It can be stipulated by the contract, but will come as a surprise for the investor anyway, especially when and by how much the price will grow. Price rise can be gradual (2-3 time for the whole period of payment) or sudden - by 10-15% several months before the accomplishment of works. "We do not hide that in the progress of construction the price for an apartment may grow. Considering that average term of construction works makes 1.5 years, the price rise occurs once in 3-5 months by 2-3%. We warn investors two week before. Price rise is explained by cost increase of building materials and the stage of construction," the sales department of one of the Kyiv residential complexes told ForUm. Those companies, which do not increase prices during the construction period, usually set higher prices at the initial stage. 
Sometimes it happens that investors have to pay extra for "extra" area. For example, an investor has bought a 40-square-meter apartment, but according to estimations of the Technical Inventory Bureau, the actual area size makes 41m2.  In the result, the investor may get a new debt in the amount of 10-11 thousand hryvnias. "Margin of error of 1 sq m is admissible," sales manager Kateryna Stukalska says and adds that if an apartment appears smaller, the developer compensate the difference.

In-depth investigation

Before studying the contract and buy an apartment, it pays to learn as much information about the developer, legal firm, prime contractor as possible, including legal name and ID code. With this information you can control whether the company has been involved in court disputes, and if yes what those disputes were about. If you feel  you cannot fully understand the legal side of the issue, it is better to seek consultation of a lawyer, who can explain you the details. Do not forget about Internet - the biggest source of information, both positive and negative. Every real estate developer has a website and clients' feedbacks on its forum, who do not hesitate to complain if something goes wrong.

The length of experience on the market, number of fully commissioned and work-in-progress residential properties, absence of abandoned construction or delays in commissioning  also tells about work ethics of a developer. It is also important what banks credit the project. It would be suspicious if only one small bank trusts the developer, wouldn't it?

However, apart from risks, there are certain bonuses real estate developers offer their clients, using various programs, loyalty scheme, discounts. At the same time, take into account that significant "gifts" are provided for hard-to-sale projects, and not for popular economy class residential property.
Moreover, some developers take into account that many people prefer secondary residential real estate due to its readiness for immediate move-in. For this purposes developers offer the ready product - a new apartment with interior, including finishing works, like tiles, laminated flooring, linoleum, installed heating radiators, entrance door, toilet and bathroom appliances, etc. The investor has only to paint the walls as he sees fit and bring in the furniture. Such apartments cost 1200-1300 hryvnias more per every square meter. On the other hand, for those who want to make an artist built apartment, it is a waste of money.

So, there is a whole list of parameters, which must be taken into account wile buying a new dwelling. But it does not mean you should be afraid of the deal, just approach it attentively and properly.

What documents to inquire before making the deal:

•    constitutive documents
•    license issued by the Ministry for regional development. The document must be printed on a letter-head with hologram and signature of Ministry's authorities, and the validity period must cover the term of construction
•    document proving the developer's right for building land
•    permission for multi-family development
•    housing project approved by the State Architectural-and-Constructional Surveillance Inspectorate
•    appraisal mission report
•    construction project drawings and specifications, including amendments, legal address and terms of commission

Andriy Boyarunets


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