The Ukraine Crisis Is Already Having a Major Impact on Real Estate. Here's What You Need to Know.
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Loading... - Zander Lambros
- 04 Oct 2022
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Unless you've been living under a rock, you've seen that Russia has invaded Ukraine. In part because of the more than two million Ukrainians who have been forced to evacuate since the beginning of the conflict, we're seeing a dramatic shift in European real estate. Let's take a deeper dive into how this market is being both helped and hurt — as well as used as an engine for social good — amidst the first major international combat scenario of the decade.
Populations are skyrocketing in surrounding countries
Before the invasion, Ukraine's population was just north of 40 million. As of March 31, just over four million have fled the country (approximately 10% of the citizenry in a one-month span), and this figure is certain to rise before the end of the conflict. This represents the most dramatic population shift in Europe since WWII. The three countries receiving the largest number of refugees are:
1. Slovakia, with a population of 2.1 million, which has taken in 140,000 Ukrainians (representing an almost 7% increase in population).
2. Poland, with a population of 37 million, which has taken in 1.2 million refugees (a 3% increase).
3. Hungary, with an existing population of 9.7 million, which has taken in 193,000 (a 2% increase).
This creates an immense strain on both the long- and short-term housing markets within these nations. With thousands of buildings already destroyed and no end in sight, there's no telling how many of these families will not be able to return to Ukraine.
Regrettably, increased demand and limited supply will also mean rapidly rising housing costs. In Bratislava, the capital of Slovakia, the average price of a house had already risen more than 10% over the course of 2021 alone. While lucrative for landlords, we could see a 17% price increase there by this year's end, and that's bad news for already cash-strapped refugees. Fortunately, though, financial aid is pouring in from the west and the EU has moved to grant Ukrainian citizens EU citizenship for the next three years so they can safely stabilize their families. Read More...
