Currently , there is some slackness in the market of construction services. Nothing is being built or sold. While slow resolution of the land market is approaching its critical point, construction companies struggle against each other on tenders for amount of ‘discount’ which they are ready to give to obtain an order.
The protracted Ukrainian crisis radically changed business methods and its outlook. Of course, there wasn’t a dramatic activity slump among the construction companies as opposed to all the other service industries in Ukraine. Even in 2009 a number of real estate companies were still calmly finishing the building of their projects.
For instance, looking into the activities of Kharkiv company ‘Domostroj’, we can retrace the ups and downs in a building sector under crisis circumstances. Kharkiv developers began key projects in the city and its surrounding areas in the early 2000s , when Ukraine was overtaken by construction fever. Successfully delivering major projects to their investors, ‘Domostroj’ built a number of modern residential communities, retail and office centres in Kharkiv, Dergachi and Volchansk regions. In general, about 2000 hectares of land have been sold in 12 years of work.
Currently the company is in the state of suspense, because of decreased quantity of orders in the market. At the same time, the company possesses enormous areas of land intended for building. More than 538 hectares of land are waiting for an advantageous offer from domestic and foreign investors. However, the foreign investors don’t hasten to invest in Ukraine , because of its economical and current political situation.
When shall we expect more activity in Ukrainian market?
Most likely it will happen along with the stabilization of economical crisis. It is worth noting that despite this difficult historical period in Ukrainian economics , some construction objects are being unfrozen, trade centres are being built, cafes are being opened. Ukraine has now a new government and new a administration and we have to hope for an improvement of the business climate in the country. Indeed, there is hope that Ukrainian companies, including the formerly successful ones as ‘Domostroj’, will become interesting propositions for the West.