Crimea seeing sharp fall in real estate prices, increased supply

14 September, 04:01 PM
Signs in market point to drop in demand, fall in prices amid increasing panic (Photo:Andrey Nekrasov / Alamy via Reuters)

Signs in market point to drop in demand, fall in prices amid increasing panic (Photo:Andrey Nekrasov / Alamy via Reuters)

The number of people wanting to sell an apartment in Ukraine’s Russian-occupied Crimea almost doubled in September against April.

Housing has fallen in price by 30-50%, and home-buyers can mainly thank the Armed Forces of Ukraine for this.

The explosions at the Crimean airfields and the successful counter-offensive of the Ukrainian Army have led to mass sales of housing on the peninsula.

And when supply goes as demand goes down, prices nosedive.

Video of day

There are no official statistics, but the trend can be confirmed by indirect signs.

In April, Russian media outlet Lenta.ru counted 19,000 ads for the sale of apartments in the Crimea in the database of the Mir Kvartir (World of Apartments) real estate agency.

Currently, there are 33,200 of them, according to a study by NV Business. The analysis of the Avito online ads database shows the same picture: the number of offers for the sale of apartments increased from 10,000 to 15,500 from April to September.

Spinning dive

Currently, the Avito ads database includes 342 offers for the urgent sale of Crimean real estate, against 200 in April.

For example, a two-bedroom modern apartment with a total area of 51 square meters in Sevastopol on Kozacha Street, next to several beaches, a public transport stop and a kindergarten, is being sold for RUB 7.5 million (about $110,000). The owner is in a hurry to sell and is ready to conduct an online viewing.

According to Mir Kvartir, the average cost of housing in Sevastopol amounted to RUB 185,000 ($2,700) per square meter back in the spring. Given these prices, the above apartment should have cost RUB 9.5 million ($139,000).

And a three-bedroom apartment with an area of 50 square meters in the village Lhovske of the Kirovskyi district, which is 75 km from Simferopol, can be bought for RUB 2 million (about $29,000). The apartment has cosmetic repairs, and it’s only 40 km to the Black and Azov Seas. Moreover, the owner is ready to exchange the Crimean asset for a car or an apartment in Krasnodar with an additional payment.

In Yevpatoria, the owners of a Soviet-style three-bedroom apartment on Demysheva Street with a total area of 62 square meters, but a 15-minute walk from the sea, are ready to sell it for RUB 6.25 million ($92,000). Back in the spring, the average cost of one square meter of housing in Yevpatoria amounted to RUB 171,000 ($2,500). That is, a three-bedroom apartment near the sea could cost RUB 10.6 million ($156,000).

Housing prices depend not only on location, but also on its condition. However, even in this case, the difference with April prices looks significant.

These are declared prices, the real ones can be twice as low, says Serhiy Stepenko, managing partner of SV Development consulting company

“It’s obvious that no one wants to buy housing on the peninsula,” he says.

“Who will buy an apartment in the Crimea now? All housing purchase and sale agreements carried out after the annexation of the peninsula in 2014 are illegal. If Crimea is de-occupied, all of them could be declared invalid. And the buyers understand this perfectly.”

Panic rules the market

Several explosions rocked the occupied Crimea in early August, including in Dzhankoy, at the Russian military base near Saki, in Sevastopol, Kerch, and Chornomorsk. For the first time in many years, an air raid alert triggered on the peninsula, which caused panic among the population. Tourists and local residents are leaving the peninsula, as evidenced by numerous videos of traffic jams in the direction of the Kerch Bridge.

The Armed Forces of Ukraine have shown are prepared to attack Russian invaders anywhere in Ukraine, so everyone’s nerves are tense in Crimea and the occupied parts of the Donbas, says Head of the Institute for Economic Research and Policy Consulting Igor Burakovsky.

The expert says many Russians who were able to realize the Soviet dream and buy an apartment or a house near the sea, came to the Crimea after the annexation of the peninsula. Many of them that Russia had seized the territory forever.

But there is no certainty of that now.

According to market watchers, the more successes the Armed Forces of Ukraine show at the front and the closer they get to the Ukrainian Crimea, the greater the panic will be among Russians living on the peninsula. And prices will only continue to fall there.

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