Ukrainian construction market trends in 2024

Andriy Ozeychuk , Rauta Director

Demand

In 2024, the Ukrainian construction market grew by 20% in hryvnias compared to 2023 and amounted to about UAH 200 billion (€4.6 billion).

The main segments for investing in commercial real estate were warehouses and retail facilities. The most attractive for the construction of new buildings remain the Kyiv and Lviv regions, which have a large population and a good location relative to major transport routes. In 2024, the total area of new commercial projects increased by 54% compared to 2023. At the same time, the warehouse segment has doubled, and the retail segment by 5%.

The vacancy rate in the office real estate market at about 25% forced developers to slow down or suspend the development of new projects in this segment. In Kyiv, most of the newly built business centers are projects which started construction before the full-scale invasion. In Lviv, despite the increased demand for offices, 75% less new office space was commissioned in 2024 than a year earlier.

In the commercial construction market, the hotel real estate segment showed the biggest growth, which grew by 182%. This is primarily due to the active development of resort real estate in western Ukraine.

About 20% of the construction market is occupied by the restoration and protection of critical infrastructure facilities.

Demand in the primary residential real estate market increased by 12% in 2024. One of the important factors in this was the implementation of the e-Oselia program, which provided 30% of the loans for new buildings.

In 2024, the demand for the installation of solar power plants on the roofs of commercial buildings and private cottages increased significantly.

Prices

From 2019 to 2024, the cost of construction in Ukraine doubled. At the same time, the cost of construction materials and services has increased by approximately 24% over the past year.

Personnel

There is an increasingly acute shortage of qualified construction workers in labor specialties. For some positions, it is necessary to search for specialists for several months, and sometimes train employees by themselves.

The shortage of qualified personnel and high inflation are forcing employers to raise salaries and introduce new loyalty programs for employees. On average, salaries in the construction industry have increased by 15% per year, which also affected the growth of construction costs.

Construction companies are actively recruiting pensioners and women to perform work that does not require significant physical exertion: construction equipment operators, drivers, welders, etc.

The personnel shortage is stimulating Ukrainian companies to consider the possibility of attracting construction specialists from Asian and African countries.

Legislation

On January 1, 2023, the Law of Ukraine “On the Supplying of Construction Products on the Market” (EU Regulation 305/2011) came into force, which introduces a new market surveillance system to ensure the quality of construction materials. 2025 will be the last year when the old and new regulations will operate simultaneously in the construction sector. From January 1, 2026, suppliers of construction products covered by this law will be required to draw up declarations of operational characteristics and register them in the Unified State Electronic System in the Construction Sector.

Starting from August 2024, amendments to the Resolution of the Cabinet of Ministers of Ukraine No. 314 allow foreign companies to construct projects of CC2 and CC3 consequences classes during martial law, based on submitting a declaration to the licensing authority. This opens up wide opportunities for foreign contractors to implement construction projects in Ukraine, especially those financed by international institutions.

For 2025, the Ministry of Community and Territorial Development of Ukraine has planned to update 7 DBN and develop 80 standards aimed at implementing design and construction optimization processes, including BIM-technologies, as well as removing barriers to the application of Eurocodes.