The war in Ukraine has yet to end and the residents of the country are still licking their wounds as the fighting against the Russians goes on, but in war, as in war, there are already those who are looking ahead and wondering whether the instability in the Eastern European country is an opportunity for high yield real estate investments.
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In order to understand whether this is the right time to invest in real estate in Ukraine, we spoke to attorney Avi Sira from the law firm Avraham Lalum & Co. Among other clients, the firm represents the Israeli embassy in Ukraine and other international bodies. It also represents real estate projects that in total account for 3,000 apartments. Our aim was to see how real estate investors in Ukraine are dealing with the current situation.
Some construction companies have returned to work even though the war is ongoing. In a similar fashion to the way the markets responded the coronavirus crisis, the Ukraine-Russia war is impacting the real estate market in Ukraine. But it is not the only factor. When a war is ongoing, there are always those who think one step ahead. There are already investors who are seeing the war Ukraine as an attractive target because of the war. Investors who believe that the Russian-Ukrainian conflict will soon come to an end can take advantage and buy real estate at reasonable prices.
We checked several projects that are being marketed in Israel, looking at the state of the market and price levels. We found that there has been no decline in prices and representatives of several companies told us that due to the rise in building costs, there have even been price increases as apartment prices are comprised primarily of construction costs. Prices today range between $1,700 a square meter to $3,500 a square meter for luxury projects.
You don't have to look through the history books to understand that there are investors who are willing to take a gamble and invest in real estate at a time when the situation in a country is unstable and even during a period of war in order to potentially enjoy a high yield in the future. Investors should take into account that no decline in prices is currently expected and that companies have returned to work. This broadcasts a sense of relative security even amid the war.
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Another significant factor that should be taken into consideration when weighing an investment in Ukraine and which could impact the real estate market in the area is the substantial financial aid coming into the country from Europe, the United States, and large private funds.
Ukraine's acceptance into the European Union will result in further strengthening of the country's economy and its real estate market. This could result in investors from many countries around the world understanding the significant potential that exists in the country in view of the substantial price differences between investments in Ukraine and investments in other countries in Europe. At the same time, it is important to take into account that the war in Ukraine has yet to end and there are dangers that must be considered before going ahead with an investment. Therefore, investment in real estate at the current time in Ukraine is not suitable for every investor.
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