Real estate investments are unprofitable - an expert review

"It is more reasonable to invest into commercial real estate than residential", - says Valentina Kharchenko the Estate Real network director in an exclusive interview to the UBR TV channel. "It won't do if you intend to invest in an apartment with a further resale even if we take into consideration the long-term investment for 2-3 years. This investment is inferior to other forms and types of investments for today. If we consider buying a home to rent, the percentage of return is about 7 - 10% for the present day. This is less profitable than to keep these funds in current accounts, because deposit rates are now about 13% annually and investing into residential real estate lose quite essentially"- says the expert.

This is due to the fact that the housing market are still declining trend in prices, says Mrs. Kharchenko: "Prices of August 2011 compared with August 2010 have been decreased by 12%. If we look at real estate investment, it is much more interesting to invest in commercial facilities. These objects are characterized with stable prices.

In addition to this rents for commercial real estate are much higher than rates for apartments. Return line of commercial property is 7-8 years and the apartments' is 10 or more. Practically there is no speculator in this structure due to the lack of investment attractiveness of the housing market. All these purchases are made for personal use and habitation. Investments in residential property is only interesting in terms of savings", - says Mrs. Kharchenko.

Recall that for the period of August 10th to September 9th, 2011 average selling price of office space (not in business centers) in the secondary market of Kiev declined to 0.38% ($ 8) to 2105 dollars per 1 sq.m. At the same time the cheapest one remained - Svyatoshinsky district with an average of $ 1 617/sq.m., The most expensive - Pechersk district, where the average sale price was $ 3 289/sq.m.

10 October 2011
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