Posted by Jon on May 21, 2002 at 09:56:01:
In Reply to: buying property posted by Tim M on May 21, 2002 at 00:32:35:
My apologies to regular readers for repeating my standard comments! -
I used to work for the international real estate company DTZ, based in Kiev.
I personally would think very carefully before buying property in Ukraine. There are many aspects about the market that put me off buying outright. It is a very illiquid and opaque market. There is not the transparency that is normally found in developed countries such as the UK or US. This is not a mature market, as it has only been in existence since independence. Therefore if you are thinking of buying a place, consider it very much as a long term investment – you will not be able to sell it very quickly unless it happens to be very centrally located and very desirable to the (limited) market.
On the other hand, there are positive aspects - you can pick up a cottage in the countryside with trees and a stream for a thousand dollars! (It will have no gas, toilet or running water though!)
I have carried out a number of valuations for clients in both Ukraine and Romania, and it is very difficult to obtain accurate comparable sales evidence to put a value on a property. Also watch out, real estate agents are not regulated - they will take a commission from both sides if they can!
At the time I was in Ukraine, it was not possible for a foreigner to purchase land (this may have changed since though). It was possible for them to purchase property (buildings) though. This can be got around by taking a 49 year lease on the land or buying it in your wife’s name. For details on current legal aspects contact Baker and McKensie or Frischberg and Partners in Kiev.
What do you want to buy, and why?
A flat? If so, investigate carefully the state of the common parts of the building - internal stairwell, roof etc. Who is in charge of maintaining the common parts. If the roof leaks who will fix it? Zhek? Have they got the money to fix it properly? Probably not.
Unless you buy a flat in a building whose common parts have been completely refurbished or newly built (not many around. expensive) - you will have this issue to contend with.
I think it very unlikely that you will be contacted by the “Mafia” unless you are planning on buying/building a huge mansion. If you do not try to attract attention, you will probably not get any attention. If you were to be running a profitable business from the property, then the situation would be different and you might need to investigate the possibility of obtaining a good “Krisha” (roof – “protection”) or becoming friendly with someone who has “blat” like a local government official.
Consider the area you are moving into. If you move into a village, within 5 minutes of you moving in, the whole area will know that a foreigner is living there. A small flat in the centre of Yalta would be a better bet if you wanted to remain inconspicuous – more foreigners around, you will not be so noticeable.
Opportunist crime is rife. It is essential you have a strong steel front door with a decent lock, especially if you intend to leave the property empty for extended periods. Don’t buy a flat on the ground floor (theft). 3rd to 5th is best unless you enjoy climbing stairs. Lifts tend to break down regularly!
I don’t want to put you off totally, but be aware that property in Ukraine is cheap for a reason!
Good luck!
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