If we consider the figures from 2021, when the market was just opening, it can be noted that the total number of purchase and sale transactions amounted to 66 thousand, and their total area was 153 thousand hectares. In 2022 (taking into account the disconnected registers), the number of transactions decreased to only 53 thousand, and their total area amounted to only 112 thousand hectares.
As of the beginning of 2023, over 13,000 agreements have been concluded for a total area of 26,000 hectares. This is just the beginning of active work in the land market, and the number of agreements is expected to rise. The average price of land plots has varied from year to year: in 2021 and 2022, it was 38,000 hryvnias per hectare, while in the first five months of 2023, it has already reached 55,000 hryvnias per hectare. Let’s consider an example: on average, in Lviv region, the price for 1 hectare is 163,000 hryvnias, while in border regions, such as Kherson region, the price remains at 23,000 hryvnias per hectare.
It is important to understand that neither the minimum nor the maximum price is exhaustive information about the land market at this moment. This is related to the influence of many factors, including the location of the plot, particularly its proximity to or distance from the front-line areas.
Geography of the land market
We understand that the geography of the land market has changed, prices have risen sharply, but demand continues to grow. This has happened for several reasons: due to the relocation of enterprises, contaminated territories, and environmental threats in certain areas. Often, for farms in highly polluted regions, it turns out to be more profitable to reinvest in land in other locations, as this reduces the risk of damage to their own territories and ensures the continuation of production.
It is important to note that land is an investment that can be very valuable in the future. In 2024, when legal entities will be able to purchase land plots, a significant increase in their price is expected in several regions, even up to 40%. Therefore, if you have the opportunity to buy land now, it could be a very profitable investment.
Before the war, the most sold plots of land were owned by the Kharkiv region, which was one of the most attractive for investors. In second place was the Kirovohrad region, followed by the Cherkasy, Kyiv, and Chernihiv regions. However, due to the proximity to combat zones and the disconnection of registries in some areas, these lands are no longer priority regions for buying or selling. As of today, the leaders in land sales are the Vinnytsia, Khmelnytskyi, Lviv, Ternopil, and Sumy regions.
Rules for checking agreements
The conditions of the procedure remain unchanged, meaning that the restriction of 100 hectares for one individual or legal entity, officially confirmed income, and only cashless payments apply to both the lease and the alienation of land plots. Additional requirements include the consent of the tenant if the land plot is already encumbered by a lease, as well as the absence of prohibitions on acquiring rights to the land plot.
For such verification, data from the State Register of Property Rights to Real Estate, the State Land Cadastre, and the Unified State Register of Legal Entities, Individual Entrepreneurs, and Public Organizations are used.
If, during the verification, it is found that the requirements have not been met, the notary is obliged to refuse the transaction. There is a certain probability that the rules of the land market may change after the end of the war in 2024. This was anticipated as early as the beginning of the lifting of the moratorium. For example, the limit for obtaining land plots will be increased to 10 thousand hectares for one person, and legal entities will also be able to obtain the right to purchase such land plots.
New legislative act on land reform
The draft law No. 7532 “On Amendments to Certain Legislative Acts of Ukraine Regarding the Improvement of Legal Regulation of Notarial and Registration Actions in Acquiring Rights to Land Plots” has already been adopted by Parliament. This law provides for the improvement of legal regulation in the conduct of notarial and registration actions necessary for obtaining rights to land plots. The implementation of this law will facilitate the simplification of market operations.
It is necessary to understand that the land reform is not yet complete, so the market is constantly changing and there is still much work ahead of us. Overall, it can be confidently stated that the demand for purchasing agricultural land is not decreasing, but rather increasing, so investment in Ukraine should continue and the agricultural sector should develop.
In this situation, the functioning of the land market during wartime, where possible, indicates that Ukrainians believe in our victory.
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