Transition to project-based financing could increase investment security in housing in Ukraine – expert

The introduction of project-based financing modeled after the European system – where banks act as partners, monitors, and guarantors for investors – could provide a strong impetus for the growth of Ukraine's construction sector, according to Hanna Layevska, Commercial Director at Intergal-Bud.

"A shift to project financing could significantly improve investor safety, since homebuyers' funds would be attracted only after certain stages of construction are completed," she emphasized during the recent Forbes Development: Foundation for Success forum held in Kyiv. "However, this is only feasible if there is active dialogue between banks and developers."

Layevska said that Intergal-Bud is currently one of the leaders in the Ukrainian real estate market, with operations spanning across numerous regions – from Kyiv to Lviv, and from Zhytomyr to Chernivtsi. The company has also joined the implementation of European-style projects, enabling it to adopt best practices in both financing and construction.

Among the current challenges facing the domestic residential construction market, she cited a lack of solvent demand, a shortage of skilled labor, and rising production costs, which developers cannot fully pass on to end consumers.

"Today, large companies are relying on accumulated reserves to stay afloat. But declining profitability and subdued demand pose risks for the sector's continued development," Layevska said.

She also highlighted the need to expand government-backed housing programs, pointing out that more than 4.6 million internally displaced persons (IDPs) in Ukraine require new housing, while existing initiatives currently address the needs of only about one-third of them.

Among the strategic solutions that could drive sector growth, Layevska named the need to update community spatial planning, approve general urban development plans, and complete the digitization of the construction permitting system to ensure transparency in accessing baseline data.

Another critical systemic solution, in her view, is the introduction of European-style project financing, where banks serve not just as lenders but also as active partners, overseeing construction progress and safeguarding investor interests.

Intergal-Bud has been active in the residential real estate market since 2003. The company's portfolio includes 184 projects. In 2024, it completed and commissioned nearly 358,500 square meters of residential space, equivalent to approximately 3,800 apartments across 20 buildings.