Unfortunately, housing in Ukraine has long been a major issue, and the ongoing war has only made things worse. These problems are the result of decisions made—or not made—over decades, leaving us without effective mechanisms to ensure housing accessibility.
Let’s take a closer look at how this market evolved in our country, what events shaped it, and why we are where we are today.
And most importantly—what should we do next?
Ukraine Still Lives in Soviet Housing
How did things work in Soviet times? People believed housing was free, but in reality, they paid for it indirectly. The state took most of their income, kept wages low and prices high, funneling resources into defense and industry. The system of queues, Khrushchev-era buildings, and panel high-rises left a deep mark on our mentality and economy. Even at the end of the USSR, many families squeezed into communal apartments or dormitories, with just six square meters per person. Shared kitchens, bathrooms, and arguments over cleaning schedules were part of everyday life.
Queues and endless waiting shaped people’s mindset: instead of planning or striving, they waited for the state to give them an apartment. Officially, there were rules for distribution, but connections mattered more. “Blat” opened doors—helping people skip the line, get better apartments, and move faster. Informal deals outweighed official procedures.
Apartments were handed out as social handouts, not earned through economic means. There was no real estate market. Most Ukrainians got housing through state allocation or inheritance. Statistics from the “Last Capitalist” project speak for themselves: the average age of housing stock today is 46 years, and half of all buildings were constructed in the 1950s–70s. From 1991 to 2020, only 7.5% of the existing stock was added. Today’s housing is largely a Soviet legacy—most apartments were built before 1991.
Housing in the Ukrainian SSR was as scarce as many other goods. In the early 1990s, about 1.5 million people were waiting for housing in Ukraine, including 145,000 in Kyiv. Over 100,000 lived in dormitories. Waiting 25 years was considered normal, though in reality, it could stretch to 60–70 years.
After independence, the economy collapsed. Hyperinflation wiped out savings, prices skyrocketed thousands of times, and GDP fell by tens of percent. Construction plummeted: in 1995, only 7.7 million square meters were built instead of 12.2 million. Around 80,000 apartments were left unfinished. The state had no money, enterprises went bankrupt, and construction trusts lost funding.
The young Ukrainian state tried to launch housing loan programs. In 1992, a youth housing fund was created, and the following year, a law to support young people was passed. But hyperinflation killed these plans—long-term loans became impossible.
Also in 1992, the Verkhovna Rada passed the law on housing privatization. For the first time, people gained property rights—the ability to sell, buy, and pass apartments on as inheritance. Privatization gave people assets but cemented old inequalities and didn’t change expectations of state support.
In the 1990s, those who profited were the ones who bought up communal apartments, turning them into separate flats or offices. At the same time, “black realtors” appeared, seizing homes from lonely people through fraud and force. This chaos of the 1990s left a deep scar on society.
In 1997, Ukraine established the State Mortgage Institution (later transformed into the State Mortgage Fund), and in 1998, the first Mortgage Law was adopted, laying the foundation for the mortgage market. But high interest rates and short terms made loans unaffordable for most. The banking system was still in its infancy.
In the early 2000s, the economy grew, and housing became the main investment. The market skyrocketed. For example, one-bedroom apartments in Kyiv rose from about $10,000 in 2000 to over $100,000 in 2008. People bought homes not just to live in but to resell or rent out. Real estate became a way to make money.
Then came the global financial crisis of 2008, which hit Ukraine hard: GDP fell by over a third (around 35.6%), the hryvnia collapsed, and the dollar exchange rate soared, triggering economic decline, unemployment, and panic among depositors. The National Bank imposed restrictions. For those with dollar mortgages, payments jumped by 60%. Banks declared half of all mortgages problematic, most of them in foreign currency. People lost homes, unfinished buildings flooded the market, prices dropped by 25%, and trust in the system evaporated.
From 2010 to 2013, the market stabilized somewhat, but mortgages remained out of reach. In 2014, war and the annexation of Crimea crashed the economy again. The dollar tripled in value, thousands of borrowers stopped paying. Parliament imposed a moratorium on foreclosures for foreign currency loans, and over 100 banks went bankrupt. Construction halted, hundreds of thousands of families were left without housing, and the market entered a new phase of crisis.
Larisa Stavynoha, President of NGO SFNU
How the war changed Ukraine’s housing market, what we have now, and what the future holds—coming up in the next article.
