The agricultural land market in Ukraine is gradually recovering

The agricultural land market in Ukraine demonstrates stability and potential for development. Currently, its volumes are gradually catching up with pre-war indicators. This is stated in the analytical report on the state of the land market in Ukraine, which was prepared by experts of the Food and Land Use Research Center at the Kyiv School of Economics with the support of the USAID Program for Agrarian and Rural Development.

In total, from the opening of the market on July 1, 2021 to June 1 of this year, more than 145,000 land purchase and sale agreements with a total area of almost 325,000 hectares were concluded. The highest indicators of liquidity are observed mainly in the central regions of Ukraine, where the share of agricultural land in circulation exceeds 1%.

The greatest demand is for land for commercial agricultural production and land for personal farming. The purchase and sale prices for agricultural land are slowly increasing and the weighted average price already amounted to UAH 35.4 thousand per hectare. This is 13.5% more than in 2022 and almost 22% more than in 2021. Since the beginning of 2023, land in Kyiv and Lviv regions has been the most expensive.

However, there are two systemic problems: the low level of price registration in the State Register of Real Property Rights and the underestimation of land prices during transactions. Thus, since the beginning of 2023, the share of transactions with a registered price was only 18.8% of all sales transactions. At the same time, in 60% of cases, when the price of the plot was indicated, it was at the minimum possible level. And this significantly reduces the base for tax revenues in community budgets.

"Electronic land auctions are a benchmark for the fair value of land and a source of filling local budgets. According to our calculations, starting from October 2021, when the first land auctions on the Prozorro.Sales platform were launched, they bring UAH 238.86 million in income to the communities annually," KSE Agrocentr researcher Roman Neiter noted on this occasion.