It seems unbelievable that in a country experiencing active military operations, the price of land is increasing. However, this is indeed the case. This trend applies to agricultural land. What factors are causing this and will the trend continue?
A significant increase, according to official data, has been observed during the first quarter of the current year. The difference amounted to 11.2%. Concurrently, market capitalization has increased by 202.5 billion UAH.
At first glance, this trend may seem strange, but analysis shows that it is not random. The main reasons are:
- Land in Ukraine that can be used for agricultural purposes is already of high quality and has a large resource for quickly turning into a profitable platform after acquisition. In the early years of the war, potential buyers slowed down their buying and selling activities, causing prices to drop. From a business perspective, now is the ideal time for such operations, with prices not having risen definitively yet, but the attitudes of entrepreneurs and increased demand have already begun to influence price formation.
- Reduction in the amount of suitable land. Since a very large part of arable land is currently occupied or mined, every hectare of land that can be used naturally increases in value.
- The last reason is somewhat overshadowed by the first two. The rise in land prices can also be linked to the devaluation of the hryvnia against stable currencies. This process will be exacerbated due to the destruction of Ukraine’s energy system caused by Russian shelling.
It is evident that for a successful business, both fuel and electricity are necessary. Hence, some analysts believe that negative factors could soon drive land prices down again. However, at the moment, the statistics are clear: during the period from January to March, the number of land purchase and sale transactions for agricultural purposes increased by 7% compared to the previous quarter.
It is noted that the number of land purchase and sale transactions for agricultural purposes increased by 7% during this period. The price per 1 hectare rose from 37.7 thousand UAH to 42 thousand UAH. Therefore, it cannot be said that this sector is currently in a deep crisis in Ukraine. Rather, a gradual recovery has begun.
