Kyiv Renters Use New Strategy to Buy Property Affordably

Kyiv's renters are facing a daunting reality: the average price of a one-bedroom apartment in the city centre has surpassed 1 million hryvnia.

This matters now because the city's population is growing, with over 2.9 million people calling Kyiv home, and the demand for housing is outpacing supply. The Ukrainian capital's real estate market is dynamic, with areas like Podil and Obolon experiencing significant redevelopment, making it essential for renters to explore alternative strategies to get on the property ladder. The rent-vesting strategy, popular in other European cities like Berlin and Prague, is gaining traction in Kyiv as a viable option for those who want to own property but cannot afford to buy in their desired area.

In Kyiv, neighbourhoods like Kontraktova Square and Volodymyrska Street are highly sought after, with prices to match. However, areas like Troyeshchyna and Darnytsia offer more affordable options, with prices starting from around 600,000 hryvnia for a one-bedroom apartment. Organisations like the Kyiv City State Administration and the Ukrainian Real Estate Association are working to implement initiatives like the Affordable Housing Program, which aims to provide more affordable housing options for low- and middle-income families. The program, launched in 2022, has already led to the construction of over 1,000 new apartments in the city.

Rent-Vesting in Practice

So, how does the rent-vesting strategy work in Kyiv? Essentially, it involves renting a property in a desirable area, like the city centre, while investing in a property in a more affordable area, like the outskirts of the city. According to data from the Kyiv Real Estate Market Research Institute, the average rent for a one-bedroom apartment in the city centre is around 15,000 hryvnia per month, while the average price of a one-bedroom apartment in the outskirts is around 800,000 hryvnia. This means that, with a 20% deposit, a buyer could purchase a property in the outskirts for around 160,000 hryvnia, and rent it out for around 8,000 hryvnia per month, generating a significant income stream.

For example, a renter could rent a one-bedroom apartment on Khreshchatyk Street for 18,000 hryvnia per month, while investing in a one-bedroom apartment in the Troyeshchyna neighbourhood for around 700,000 hryvnia. With a rental yield of around 8%, the investor could generate around 56,000 hryvnia per year in rental income, making it a viable option for those who want to own property but cannot afford to buy in their desired area. As the city's real estate market continues to evolve, it's essential for renters to explore alternative strategies like rent-vesting to get on the property ladder.