The Ukrainian land market has already lost $325 million due to the war
![The Ukrainian land market has already lost $325 million due to the war](/uploads/files/news/-1707563724.jpg)
Losses of the Ukrainian land market from the full-scale invasion have already reached $325 million or UAH 12.4 billion. in particular, due to the war, 120,000 agreements on a total area of 355,500 ha were not concluded. According to KSE's analytical review of the Ukrainian land market, in the first three months after the full-scale invasion, state registries were closed, completely halting transactions of buying and selling agricultural land. After the renewal of the registration of deeds in May 2022, the volume of the agricultural land market decreased significantly. Before the full-scale invasion, on average, deals were made for 841 hectares per day, but in May 2022, this figure dropped to 196 hectares. In the second half of 2023, there was an average of 529 hectares of sales per day, or 37% less than before the full-scale invasion.
For the Kharkiv, Donetsk, Zaporizhzhya, Luhansk and Kherson regions, the volume of land sold decreased by 73% or more. In the Chernihiv and Sumy regions, which were significantly affected by the invasion of the Russian Federation, market volumes decreased by 32-38%. In the central regions of Ukraine, the market decreased by 10-30%. The western regions of Ukraine, on the contrary, showed growth, surpassing the indicators before the full-scale invasion. At the same time, experts specify that the weighted average price in Ukraine before the full-scale invasion was 30.7 thousand UAH/ha, and in 2023 it was 37.0 thousand UAH/ha, i.e. 21% more. Prices for agricultural land increased the most in the western regions of Ukraine, where the increase was from 20 to 40%, depending on the region. On the other hand, the lowest growth occurred in the eastern regions — a maximum of 10%.
The turnover of agricultural land last year increased by 58% — to 172.9 thousand hectares — compared to 2022. According to the State Geocadastre, since the opening of the land market, 195,900 sales and purchase agreements with a total area of 432,200 hectares have been concluded. So, as of January 1, 2024, 1.05% of all agricultural land in Ukraine was in circulation. The weighted average price for agricultural land in 2023 was UAH 37,000/ha, which is 13% higher than the year before.
It should be noted that thanks to the circulation and use of agricultural land, the budgets of communities increased by UAH 33.7 billion in 11 months of 2023. This is almost 12% of total tax revenues. The largest share of these revenues was generated by the lease of communal land — UAH 18 billion. But there probably won't be any upheaval in the land market. This opinion was expressed by the Minister of Agrarian Policy and Food of Ukraine Mykola Solskyi. According to him, since the opening of the land market for legal entities, there have been no significant changes, in particular, so far entrepreneurs are buying less land than expected. The Minister also emphasized that any restrictions on the market will lead to the emergence of new schemes to circumvent them, so the market should be liberalized as much as possible.
Since the launch of the land market in Ukraine on Prozorro.Prodazhi, up to 10,000 successful online auctions have been held for the sale and lease of land plots of various purposes and ownership. According to the auction results, the organizers received UAH 2.78 billion. The vast majority of auctions - more than 8 thousand, and this is almost 82% - are auctions for the lease of state and communal plots. With a total starting value of these lots of almost UAH 250 million, the organizers received more than UAH 1 billion in revenue from the auction results, which they will receive every year. That is, on average, the starting price increased by almost a quarter. And these are additional funds to the community budgets.
Among the communities that leased the most land plots are the Baltic City Council (171 auctions), Kuyalnytsk Village Council (140), Oknyansk Village Council (108) and Novoborysivsk Village Council (102) of Odesa Oblast, Buryn City Council (109) of Sumy Oblast and Belz city council (105) of Lviv region. According to the level of income, respectively, the largest sum of signed contracts is with Oknyansk settlement council (UAH 22,512,657) and Zelenogirsk settlement council (UAH 12,727,660) of Odesa region, Pustomytiv city council (UAH 11,769,697) of Lviv region, Ustiniv settlement council (10 UAH 108,761) of Kirovohrad region, etc.