The real estate rental market in Ukraine is almost completely unregulated. Prices are constantly rising, and sometimes even exceed the cost of renting in European countries.
In addition, neither the tenant nor the landlord, who are included in this process, are practically not protected. About what is wrong with the Ukrainian real estate rental market, and how this situation can be corrected, reports the Chronicle.info with reference to Channel 24.
As of 2021, the average cost of renting a one-room apartment in areas close to the center of European capitals was USD 925 (UAH 24,500). The most expensive European capital as of October 2021 was London, where the average rental price for a one-room apartment was $2,310 (61.2 thousand hryvnias). In second place is Dublin, where for a month of rent it was necessary to pay $1,952(51.7 thousand hryvnias), the third is Luxembourg with an average cost of $1,819 (48.2 thousand hryvnias).
Pay attention! Data in national currency are indicated at the rate of 26.5 hryvnia per US dollar — this was in October 2021.
Rating capitals with the cheapest housing for rent led Istanbul, where they asked $231 for a month renting a one-room apartment (6.1 thousand hryvnias). Behind him is the capital of Macedonia Skopje with a cost $285 (7.5 thousand hryvnia). Sarajevo — here the rent cost $296 (7.8 thousand hryvnia).
The capital of Ukraine in the fall of 2021 took 23rd place in the ranking of 37 cities. Housing in Kiev was attributed to the middle price segment — rental rates in the center started from 500 dollars (13.3 thousand hryvnias in October 2021). Estimated monthly rent for a one-room apartment is USD 620 (UAH 16.2 thousand).
Given that the average salary in Ukraine, according to the Numbeo index, is at the level $464 (13.3 thousand hryvnia as of January 31, 2022), then you can understand why renting a house in our country is becoming increasingly difficult.
According to the State Statistics Service, you will have to pay for a month of rent in different cities of the country (in hryvnias):
- Kyiv — 8,512.63;
- Vinnytsia region — 3,722.65;
- Volyn region — 3,420.61;
- Dnipropetrovsk region — 3,686.33;
- Donetsk region — 3,109.73;
- Zhytomyr region — 4,109.51;
- Zakarpattia region — 4,398.90;
- Zaporozhye region — 2,904.74;
- Ivano-Frankivsk region — 2,618 .59;
- Kyiv region — 3,882.70;
- Kirovohrad region — 2,805.23;
- Luhansk region — 2,255.68;
- Lvov region — 5,191.27;
- Nikolaev region — 3,206.28;
- Odessa region — 5,198 .45;
- Poltava region — 4,094.32;
- Rivne region — 3,925.13;
- Sumy region — 2,364.34;
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- Ternopil region — 2,972.29;
- Kharkiv region — 4,965.51;
- Kherson region — 2,852.12;
- Khmelnitsky region — 4,201.98;
- Cherkasy region — 3,808.83;
- Chernivtsi region — 3,957.91;
- Chernihiv region — 3,363.44.
Although it is worth noting that real estate rental prices are still higher than the State Statistics Service shows. Since finding an apartment in Kiev for 8.5 thousand hryvnias is quite difficult. Most likely, it will be a shabby one-room apartment, which is located as far as possible from the metro.
A logical question arises, what to do with the rental market in Ukraine and how to regulate it? We talked to experts who told us about the first steps that will help remedy the situation.
Why rental prices are constantly growing
Kristina Gordienko, lawyer at «Anastasia Gurskaya» law office ;, noted that according to various expert estimates, on average, the purchase of real estate increased by 18 — 20%, in accordance with this, the rental price is also growing.
One of the main factors, in my opinion, which influenced the growth of real estate in price by almost 20%, are the so-called future changes in the Tax Code of Ukraine regarding the taxation of builders of primary housing. In this regard, the developers raised prices, in turn, these changes caused an increase in prices in the secondary market, as a result — in the rental market,
— explained Gordienko.
She added that the second factor in the growth of rental prices is the increase in utility tariffs. Owners who take full payment for an apartment, including all payments, objectively understand that the rates are growing, respectively, and the rent needs to be raised.
The third factor, apparently, is migration processes. People in search of a new job and new earnings are trying to move closer to the center of Ukraine, hence the demand for rental housing. The fourth factor, of course, is inflationary processes, the economic situation in the country, and so on,
— the lawyer specified.
Semyon Yatsenko, a lawyer practicing in the field of contract law, in particular, the lease and sale of real estate, explained that in Ukraine the rental market for real estate is closely connected with the market for its purchase and sale.
Given that prices for real estate is growing, rental prices are also increasing. Some people have purchased housing specifically to make money on rent, so increasing their income is a desirable goal for them.
Especially given the fact that real estate is rented out unofficially, it turns out that the appetites of landlords are exorbitant in general. Also, for most landlords, a change in the exchange rate is the basis for revising lease payments,
Yatsenko noted.
How to regulate the rental real estate market in Ukraine
Semyon Yatsenko clarified that, first of all, you need to go into the legal field — conclude formal agreements. In this case, you can limit the arbitrariness of landlords. Secondly, you need to participate in social movements. In particular, a procession was recently held to protect the rights of tenants.
Third, you need to be a strong negotiator. If you are confronted with the fact that tomorrow you are either moving out or paying more, then you must be able to protect your interests. Or contact a lawyer who will help you find «trump cards»,
— the specialist recommended.
He added that in general this market is settled. Chaotically, but there is a legal basis, and sufficient. The key problems of this market are the unwillingness to pay taxes and the opinion of landlords that they can do anything — even abuse the rights and harm the rights and interests of the tenant.
Now housing lease agreements provide an opportunity to register in this housing. However, in some localities this is de facto impossible. In Kiev, there is no register of housing lease agreements, which is formally required for automatic registration in rented housing. It turns out that tenants have «bird rights»,
— said Yatsenko.
He clarified that in some countries real estate can only be rented through an intermediary. However, the expert is sure that this option is not feasible for Ukraine. Our legislation is sufficient, but it would be better to introduce an effective mechanism for its enforcement.
Kristina Gordienko believes that the real estate rental market in Ukraine needs legislative regulation, since this segment is the most sensitive to various economic processes.
The most effective way to regulate the market is to adopt an appropriate law, but, again, first you need to remove the «shadow» housing rental market in Ukraine and develop rules for its regulation in order to ensure maximum legalization of housing rental transactions,
— Gordienko specified. She gave an example that in Spain the new law on housing includes price regulation in areas with «high demand for rent» and an increase in property tax in the event that housing is vacant. In addition, such a law includes regulation of the rental price for landlords who own more than ten houses. Thus, they should reduce the rent «in areas with high demand».
In Ukraine, such a provision in the law would be very appropriate due to the fact that about 80% of the real estate market is in the shadow .
In Ukraine, an affordable rental housing program could be introduced, for example, as in Portugal. The Programa do Arrendamento Acessível or PAA is voluntary and aims to help expand the supply of rental housing at reduced prices consistent with household income.
The program seeks to meet the housing needs of families whose incomes do not allow them to access the housing market that meets their needs. This measure aims to stimulate the supply of rental housing at reduced prices, contributing to greater attractiveness, security and stability in the sector. Such a program in Ukraine could be introduced within the framework of local housing programs, thereby contributing to the development of a public rental offer,
Gordienko noted.
Another example would be the real estate rental market in Canada, which is very regulated. This applies to the lease agreement itself, which always protects the interests of tenants, as the weak side of the agreement. Thus, the landlord does not have the right to arbitrarily raise the rent: according to the general rule, it can be raised no more than once every 12 months, and only on the percentage set for everyone.
Such a condition in Ukrainian legislation would take control of «crazy growth» rental prices.
It is a very interesting fact that in Ukraine the tenant pays the commission in almost all cases. In Canada, it is customary that the party that rents/sells pays for the services of agents, and, as a rule, the commission is divided between the agencies in which the agents of the parties are members, in half,
— Gordienko specified.
According to her In my opinion, such a norm would reduce the burden on tenants, because, in addition to the realtor's commission, a security deposit is always paid in Ukraine.