PRICING REAL ESTATE MARKET: THE UNCERTAINTY ASPECT

Abstract

The article examines the pricing peculiarities of the real estate market in Ukraine, which is subject to high uncertainty. The purpose of the article is to investigate the issues and consequences of pricing in the real estate market when faced with uncertainty in Ukraine. The purpose set in the article was achieved using methods of induction, deduction, generalization, and system analysis method. The article explores the factors that influence the pricing of real estate for apartments, such as interplay between supply and demand, psychological factors, interest rates, mortgage rates and external events like pandemic and war. For example, the Covid-19 pandemic has led to a decline in the demand for housing, particularly in the cities where the rate of illness was highest. War and conflicts have an adverse effect on the real estate industry, causing destruction, loss of life, and economic and political instability. Uncertainty and risky circumstances often cause people to delay their real estate transactions. Ukrainian property developers are experiencing hard difficulties dealing with war that manifest themselves in resulting buyers delaying loan repayments, stopping regular payments, and hesitating to invest in new construction projects. Investors become cautious and avoid real estate investments that may decrease in value after the war conflict ends. As a result, apartment prices decrease, and it becomes more difficult to sell them. The authors suggest that effective pricing strategies for real estate sellers include setting a competitive price or offering additional guarantees. The article also provides examples of how the real estate market has been affected by the coronavirus pandemic and the war in Ukraine. The authors emphasize the importance of understanding and managing uncertainty in real estate pricing to make sound decisions aligned with goals and values. The article includes data and statistics from various sources, such as Ukrainian real estate portals and the State Statistics Service of Ukraine.