Odessa Ukraine real estate investment potential

Odessa Ukraine real estate investment potential

Income from foreign investments in Ukraine has been continually increasing for a number of years now. One of the most attractive areas for foreign investors is real estate. This is because of its great potential for development. Over the past few years real estate prices have been rapidly rising, which provides good opportunities for high returns on investment in this sector.

Kiev, the capital city of Ukraine, is the centre for the majority of all property investment in Ukraine at the moment. However property investors are quickly entering markets in other towns and cities across Ukraine.

Odessa is second to Kiev in terms of its attractiveness for foreign investors in Ukraine. It has one of the country's most dynamically developing and original real estate markets. The market offers great investment opportunities in residential, industrial, office and retail properties. It also benefits from the city's flourishing tourist trade.

Odessa's real estate market is not as mature as Kiev's. This means that there is not so much competition as in the capital and that there are more opportunities and higher returns for investors.

There are other compelling reasons for making property investments in Odessa: the strategic location of the city, good labour resources, unsatisfied demand for real estate, and, last but not least, the land auctions organized by the city government.

Residential property

In Odessa's residential property sector demand continues to exceed supply, and it is forecast that it will not be met in the near future. Limited supply and unsatisfied and increasing demand, combined with growing domestic purchasing power, provide many opportunities for investors.

Odessa is second only to Kiev in terms of price growth on the residential property market in Ukraine. Continuous price growth has made the sector one of the most profitable and reliable for investors. This trend is further fuelled by the continuing migration of people from rural areas into Ukraine's big cities, of which Odessa is one.

Residential property prices in Odessa are set to keep growing as long as demand continues to outstrip supply.

Commercial property

Odessa's commercial real estate market is also highly attractive for foreign investors and has great potential for profits and returns. The opening of new businesses, the expansion of existing businesses, and the growing presence of foreign investors in Ukraine have boosted demand for commercial real estate. Moreover, demand for high quality retail space, office facilities and warehouses will not be met in the near future, as commercial space is in short supply.

Retail property

Ukraine is ranked as one of the most attractive and promising retail markets worldwide. Growth in consumer spending and the corresponding expansion of the retail market in response to strong demand mean that the retail property market is undergoing a phase of healthy development.

Apart from Kiev, the highest demand for retail real estate is in Odessa, which is located at the crossroads of key transportation routes. There is demand both for retail trade centers as well as independent stores. At present Odessa is short of new retail real estate projects, which offers great opportunities for foreign investors.

It is important to note that when buying property in Ukraine foreign investors can face the following problems: corruption, lack of regulation, lack of controls and an insecure legal framework for enforcing personal property rights.

The most essential tip for prospective investors is to have a well-informed independent adviser who can speak both English and Ukrainian, the language in which real estate transactions are conducted. Failure to obtain legal advice can result in disastrous financial losses. It is particularly important to have a decent local lawyer, who is well versed in local legislation. Any lawyer can read local laws, but you have to be local to know them properly.

Odessa's property market is most certainly an emerging one and comes with all the problems commonly associated with an immature market. However, emerging markets also bring unrivalled potential for substantial profits and often offer the best investment opportunities in the longer term. The risks involved in investing in Odessa's property market are greater than average, but, then, so are the potential returns.

This is an incredibly exciting time for property investors in our city. The real estate sector remains an emerging market with huge room for growth and development.