Ukraine Property Market Overview

Ukraine is a huge country and its property market has huge potential.

Prices in Ukraine�s major cities have rocketed over the last 5 years, particularly at the luxury end of the market, fuelled by dirty money and the fact that most Ukrainians don�t trust banks.

The Ukrainian economy has still a long way to develop to reach parity with the west, though its economy is expanding rapidly year on year and it has huge natural resources.

There is no capital gains tax on the first property owned, only 1% inheritance tax, no restrictions on foreign ownership for residential property and low buying costs.

Unfortunately there are still no real mortgages for foreigners and locals have to pay around 10-12% interest on their loans, this is a definite damper on the markets growth.

Prices in the major cities, such as Kiev and Odessa, are very high. There is a definite lack of transparency in the market place (especially as the large developers in the country are part government owned) and thus it is difficult to gauge what is a fair price to pay for a property, once the market frees up more there is likely to be a shake up in price levels.

There are some properties being promoted in the Carpathian mountains, in towns such as Slavsko, however, these are dud investments and will not make investors money. Far better buy a ski apartment in Bansko in Bulgaria � and that is far from recommended.

Overall, the Ukrainian property market could prove to be very interesting, especially if suitable mortgage products are introduced. However, we feel right now it is too early and there is much better money to be made elsewhere in central Europe for far less risk and hassle.