EXPLOITING UKRAINE'S EXPAT COMMUNITY?

UKRAINIAN REAL ESTATE: Are Kyiv landlords guilty of overcharging expats for rent?

Expat tenants in Ukraine often complain of inflated rental rates – but undersupply of suitable accommodation is also a factor

Tim Louzonis
Monday, 17 October 2016 00:51

The early autumn months are traditionally the peak relocation season for expats. For new arrivals to Ukraine, this means coming to grips with the Kyiv real estate market. If you asked a random selection of Kyiv expats whether they believed they are paying a fair price to rent their apartments, a good number would tell you they suspect they’re being overcharged. There have long been suspicions of an unofficial “expat tax” imposed by unscrupulous Kyiv landlords, but are these fears justified?

 

Exploited expats?

The idea that you’re being ripped off because you are a foreigner who is far from home is not new. As human beings we are wired for this type paranoia. And let’s be honest - it does happen. Here in Kyiv there is no shortage of dishonest brokers who are prepared to take advantage of foreigners unfamiliar with the local real estate market. Actually, it is worth noting that such brokers do not generally discriminate and will readily victimize local clients too. If in doubt, it is a good idea to compare notes (and rental rates) with local friends. 

Perhaps your employer is using a relocation company to provide you with housing in Kyiv. In this situation, the relocation company may be outsourcing your property search to third-party service providers who may not be interested in showing relocating expats all of the available properties on the market. Technically, you’re not being scammed, but often you’re not getting the best possible housing that your budget would allow. Other large businesses and international organizations may have housing committees, tender requirements, and cumbersome housing search policies that can “tie the hands” of your real estate agent and put you at a disadvantage when you’re competing with other tenants for “more desirable” properties in downtown Kyiv, leaving you with the leftovers or otherwise less desirable properties.  

 

Quality property shortage

All of the above circumstances can obscure the fact that there is a real shortage of quality housing in central Kyiv suitable for expats.  But what exactly constitutes “suitable expat housing”? In most cases, this will mean apartments in downtown Kyiv that have been renovated to the level, taste and style of expats. If you’re fortunate enough to have a generous housing budget in Kyiv, then apartment-hunting will mean encountering properties with a garish, baroque decor that recalls ex-President Viktor Yanukovych’s ostentatious Mezhyhiryia mansion. Inside these properties you’ll find lots of flashy but often impractical design touches such as overly fancy chandeliers, custom lighting, and giant gaudy murals on the walls. There’s often a mismatch between the tastes of owners and the size of these properties, leading to incredibly expensive, over-the-top renovations. The owners of such apartments are usually looking to recoup their renovation costs quickly and can seem mystified by the lack of tenants who are ready to meet their price expectations. By contrast, expats as a whole - and Scandinavian tenants in particular - usually want something light and bright, with neutral colouring and a minimal decor that is understated as opposed to heavy-handed, and more like IKEA than Beverly Hills.

Bathrooms and kitchens in expensive Kyiv flats can often be showrooms for puzzling design choices and missteps. Bathrooms will sometimes contain big jacuzzis that no one uses instead of more modest and practical shower closets or low-set bath tubs with showers. Or you’ll find toilets that are installed too close to the wall leaving no leg room, space-eating bidets in bathrooms that aren’t large to begin with, or flimsy hooks instead of large solid (preferably heated) towel racks. Sometimes otherwise nice apartments in good locations can fall short of expectations because the kitchen or bathroom hasn’t been renovated recently, or you encounter partial renovations where corners were cut and it’s obvious that the landlord ran out of money while renovating his apartment. Such apartments may feature older appliances which might have been top of the line in their day but are now approaching the end of their useful lives. Other questionable features include kitchen countertops made of compressed cardboard and composites instead of better materials such as natural stone, or a renovation style that dates back to the 1990s or early 2000s.

 

Easy fixes and structural problems

Sometimes the shortcomings of a flat can be easily remedied with relatively inexpensive fixes if the apartment owner is amenable, such as adding a boiler (hot water heater) or additional air conditioning units. But other drawbacks are structural and offer no easy fixes. One common problem is the presence of “yolochka” - a cheap parquet flooring that easily collects dirt instead of higher quality laminate flooring. 

Sometimes the building itself is the problem. For example, higher floors in older buildings can have weak water pressure, and entrance areas are often in bad condition. Some apartments lack elevators, or have elevators too small to accommodate baby strollers.  And finally there is an acute shortage of parking in Kyiv. Even the underground parking garages of newer apartment complexes often have space for less than one car per apartment. 

All of the above shortcomings limit the supply of housing for expats in Kyiv and contribute to a structural deficit in a city where the average living space per person is less than half the EU standard. While this deficit does exist, the news is not all bad. Despite the presence of landlords and agents seeking to inflate expat rents, in many cases expats can actually enjoy price leverage because they are seen as highly desirable tenants. Expats are considered “safer choices” over local tenants since they will often stay longer, while a local tenant may be there only as long as it takes to complete a renovation, find a new job, or otherwise change his or her circumstances. So being an expat is not necessarily a disadvantage, but it can reduce your rental options.

About the author: Tim Louzonis (This email address is being protected from spambots. You need JavaScript enabled to view it.) is a co-founder of AIM Realty Kiev, a real estate agency that specializes in real estate for foreign expats. Tim is a long-time expat with Ukrainian roots; he first came to Ukraine as an exchange student in 1993 and returned in 2008

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