"Marketing won't save you if construction sites are silent." Insights on the 2024 outlook for the primary real estate market. Interview with the manager of Greenville projects.

To understand what is happening in the primary real estate sector, the challenges faced by developers over the year, and the future development of the industry, we spoke with Natalia Dubyk, head of Kyiv projects for the Greenville Group of Companies. This brand is constructing business-class residential complexes in the capital, namely Greenville Park and Greenville on Pechersk.

Ms. Natalia, how would you describe the real estate market in 2024 in one word?

This word is adaptation. The year 2024 has become a moment of truth for the entire real estate market. In the context of a full-scale war, every developer had to quickly restructure their strategies and make decisions amid uncertainty. Since spring 2022, we have seen construction gradually adapt: projects were revived, new ones commenced, and demand, although slowly, began to return. This indicates that the Ukrainian primary real estate market possesses remarkable resilience. We are currently in the midst of a storm that will last until the end of the war. New challenges arise almost daily, so decisive, comprehensive, and strategic actions are necessary.

What key characteristics of the market over the year can you highlight?

First of all, low demand. It currently stands at approximately 20% of the pre-war level. The reasons are clear: war, enemy shelling, inflation, and a decline in purchasing power. Moreover, property prices are rising. But the main factor is uncertainty. Even those ready to purchase housing prefer to hesitate, wait, and take a pause. This is particularly evident after each series of massive shelling. Deferred demand currently occupies a significant share of the overall demand structure – up to 60%. Geographic unevenness in demand has also become a characteristic feature. While in Kyiv, western, and central regions it remains relatively stable, the situation is entirely different in frontline areas where construction has nearly come to a halt.

The second factor is the rise in property prices. During the autumn, the average price per square meter increased by approximately 4%. Although this increase is not critical, its impact is felt. The main reasons include: labor shortages due to mobilization; rising costs of construction materials; complications in logistics and production processes; and frequent power outages. As a result, the cost of construction has risen by 45%. This also affects the pace of commissioning facilities.

The third trend is the active use of marketing tools. Developers are trying to stimulate demand by all possible means. Installment programs, special promotions, and bonuses like "apartment + gift" are becoming standard practice. This not only helps attract buyers' attention but also creates healthy competition in the market. Developers are seeking solutions, and buyers are choosing companies that can guarantee stability and transparency even in challenging conditions. This reflects both the maturity of the industry and the potential for further development.

Can effective marketing compensate for construction issues?

I am confident that it cannot. No marketing strategies, no matter how creative or innovative, can cover the lack of real activity on construction sites. Buyers today are very informed and attentive. They monitor the progress of construction, analyze the reliability of the developer, and seek confirmation of real actions, not promises. In the current climate of uncertainty, marketing can only attract attention, but without dynamics on construction sites, it will be futile. Buyers trust what they can see with their own eyes – working cranes, completed sections, and adhered timelines. Silence on the construction site signals risk to the client, overshadowing even the best advertising campaigns.

What do you think has influenced demand the most this year?

Demand in the real estate market this year has been shaped by several key factors. As always, regular seasonal fluctuations played a role. However, the greatest influence came from military and political factors, which constantly kept clients in a state of uncertainty. The intensity and frequency of shelling, especially massive attacks on the capital, created ongoing psychological pressure. After such events, deals were typically postponed for an average of 3-6 months, as buyers adopted a wait-and-see approach. Uncertainty following the change of power in the USA, threats from the enemy to use intercontinental weapons, and news from the front significantly heightened caution among potential buyers. These factors have led to a significant increase in deferred demand, which now accounts for up to 60% of the total market. Many clients are waiting and delaying their decisions to purchase housing, even if they have the financial capacity to make such a deal. Nevertheless, developers who communicate transparently with clients and create clear installment programs have every chance to attract clients ready to invest in their own housing even now.

Considering these conditions, what can be said about the dynamics of construction in the capital? How much has it recovered and how actively are works ongoing at construction sites?

The dynamics of construction in Kyiv for 2024 show some stability but simultaneously clearly outline the challenges facing the market. Overall, about 80% of developers reported the resumption of construction during this and last year. This indicates that most companies have managed to adapt to wartime conditions. Moreover, some developers have even started new projects, which is an undeniably positive signal for the market. However, it is important to understand that not all these statements reflect actual activity. Actual work is being carried out on approximately half of the declared sites. In many cases, we observe more imitation than real progress. Active developers with a clear strategy are currently in a winning position. Demand, which was previously evenly distributed across the market, is now concentrating on those developers who demonstrate real results. There are few such developers in the business-class segment, but they set standards and maintain leadership.

What has this year been like for the Greenville company? What have you accomplished and what are your plans for the future?

One of the main achievements under current conditions for the company is the preservation of our workforce and stable development. This enables us to continue building. In the residential complex Greenville on Pechersk, significant progress has been made: 95% of the framework of two sections has been completed, glazing works are ongoing, and the monolith of the underground parking is fully ready. Completion of these sections, connection to utility networks, elevator installation, and the start of a new section are planned for 2025.

At Greenville Park in Podil, the framework and walls have been completed, and work is ongoing to connect internal and external networks, roofing, and glazing. Next year, we plan to set up electrical networks, water supply and heating, launch elevators, and finish the facade.

This year has been filled with challenges for us. Mobilization and staff shortages forced us to reorganize teams, while logistical difficulties required us to restructure supply chains. Despite everything, we strive to demonstrate stable and incremental progress. We are especially grateful for this to the Armed Forces of Ukraine, whose protection allows us to realize our plans.

Among our primary goals for 2025 are completing key stages in current projects and launching two new residential complexes in Kyiv and Lviv.

What type of housing are people looking for when they come to the sales department of Greenville Park and Greenville on Pechersk? What has been the general profile of your target audience for these projects this year?

Our residential complexes belong to the business segment. Therefore, the demand from buyers is corresponding – their attention is focused on functionality, technology, and quality of materials. Consumers prefer functional apartments with well-thought-out layouts that allow for the most efficient use of space. One of the key criteria for clients is stable construction progress, even if the pace of work has slowed.

Buyers carefully analyze the reputation of the company, its ability to complete projects, financial stability, and readiness to adapt to challenges. Residential complexes with developed infrastructure, the concept of "city within a city," and autonomous solutions are currently in the highest demand. Safety also remains a priority: the presence of shelters, underground parking, access control systems, ventilation, and fire protection has become a mandatory condition.

Our target audience consists of active, modern individuals with high income levels who value quality, comfort, and safety. This includes young families, entrepreneurs, IT professionals, lawyers, medical workers, civil servants, military personnel, and veterans.

What do you think the real estate market will look like next year? What should we expect?

We have entered the traditionally challenging winter period during wartime. If the market maintains its current positions, it can be considered a positive outcome. A price increase in the primary market of 5-7% is expected by the end of next year. In the event of a deterioration in the economic and military-political situation, further decline in demand may occur, leading to a halt in construction at several facilities. Conversely, under an optimistic scenario – the end of the war in 2025 – the market anticipates gradual recovery. This process will not be swift, as full restoration requires time, stability, and trust from buyers and investors. In any scenario, key factors for developers remain adaptability, transparency, and the ability to build trust.

Lastly, what do you think developers need to continue working successfully in crisis and wartime conditions?