Business Day Conference, Confederation of Builders of Ukraine (Oct 1, 2024)

Conference Organizers: Confederation of Builders of Ukraine (CBU)

Topics Covered: The first session focused on enhancing vocational education, particulary in practical training, infrastructure development, and preparing a skilled workforce for Ukraine's construction industry. The second session centered on real estate market trends, covering legal frameworks, project updates, and shifts in buyer preferences for smaller, ready-to-move-in properties in Ukrainian cities.

Speakers:

10 am Session:

• Oleksandr Chervak: Executive Director of the Confederation of Builders of Ukraine. He led discussions on business collaboration and vocational education, and coordinated the event's proceedings.
• Dmytro Zavhorodnyi: Deputy Minister of Education and Science of Ukraine. He discussed the importance of vocational education, infrastructure development in educational institutions, and the need for collaboration with businesses to enhance vocational training.
• Yuliya Epifanova: Deputy Head of the EdUP Project. She focused on private sector engagement in vocational education and detailed ongoing initiatives to modernize the vocational training system with business collaboration.
• Iryna Lilyk: President of the Ukrainian Marketing Association. Presented a research study on vocational education in construction, emphasizing the views of employers, educators, and students on vocational training programs.
• Olena Buchynska: Expert of the Ukrainian Marketing Association. Co-presented research findings on vocational education and the challenges faced by students and businesses in practical training and internships.
• Iryna Shumna: Director General of the Directorate of Vocational Education at the Ministry of Education and Science. Spoke about the motivation of vocational education institutions to collaborate with businesses and the potential future innovations in the system.
• Yuriy Sidenko: Director of Univers. Shared insights on the importance of business involvement in vocational education, particularly in addressing the construction workforce shortage.
• Oleg Borisov: Deputy Chairman of the Builders' Trade Union. Provided practical examples of business cooperation with vocational schools, including how seminars and industry collaborations help improve vocational education.

1 pm Session:

• Olena Sydorchuk: Legal expert who introduced the legal framework related to real estate construction projects, focusing on the laws governing property rights and developer-buyer obligations.
• Dmytro Struk: Project leader of Gravitation Park. He discussed the progress of the Gravitation Park project, updated on its current state of construction, and shared insights on investor returns and changes in apartment sizes.
• Olena Unanyan: Real estate analyst. She presented data on real estate trends in Ukrainian cities, the price differences between listed and actual sale prices, and how secondary market activity influences primary sales.
• Anna Anisimova: Market expert. She focused on changing buyer preferences, the shift in demand for smaller apartments, and the growing popularity of ready-to-move-in properties among buyers.

Outline of 10 am session:

Meeting to discuss vocational training in the construction sector.

• [00:03:37] Business and Vocational Training Collaboration: Emphasis on the need for businesses to shape professional competencies through partnerships with vocational institutions to meet labor market demands.
• [00:07:03] Challenges in Education: The Ukrainian vocational education system faces challenges such as outdated perceptions of internships and a shortage of skilled workers, which require collaboration to resolve.
• [00:09:05] Government Efforts: The Ministry of Education is focused on improving vocational and technical education through infrastructure projects and partnerships with international organizations.
• [00:10:51] Internship Organization Issues: Businesses face challenges in organizing profitable internships, with a need for cultural shifts and potential legislative changes for certain industries.
• [00:18:57] International Investment: Large-scale investments from international organizations are being used to upgrade vocational institutions, especially those affected by war, with a focus on construction-related programs.
• [00:20:28] Supervisory Boards and Reforms: Plans to implement supervisory boards in vocational schools to increase business involvement in shaping education standards and training.
• [00:19:00] Local Government and Business Coordination: Regional management issues were raised as obstacles in vocational education reform, with calls for improved cooperation between local councils, businesses, and vocational schools.
• [00:35:26] Employer Feedback on Graduates: A study revealed mixed feedback from employers, showing satisfaction with some vocational graduates but highlighting the need for better practical training and soft skills.
• [00:50:42] Vocational School Investments and Inclusivity: Significant investments are planned for modernizing vocational institutions, including infrastructure improvements for accessibility.

Outline of 1 pm session:

• [00:00:00] Legal Framework - Olena Sydorchuk introduces the legal framework affecting construction projects in Ukraine, focusing on the October 2022 law regarding property rights for future real estate developments, timelines, financing, and developer-buyer obligations.
• [00:05:18] Gravitation Park Project Overview - Dmytro Struk outlines the Gravitation Park project, highlighting the reduced building height to four stories. He emphasizes the trend toward smaller, more predictable construction projects, with gas stoves and heating systems playing an important role.
• [00:07:04] Construction Update - Struk provides a live update on the current progress at Gravitation Park, stating that construction is at the third and fourth floors, with upcoming sales phases announced.
• [00:08:45] Investor Returns - Struk discusses return rates for investors, emphasizing that investors can expect returns within ten years. The installment plans offer up to three years with a 10% down payment for long-term investors.
• [00:09:01] Apartment Sizes - Struk introduces changes in apartment sizes, mentioning that two-room apartments have been reduced to meet modern economic realities and trends. He provides examples of successful smart apartments in Kyiv.
• [00:11:02] Real Estate Trends - Olena Unanyan presents an analysis of real estate trends across Ukrainian cities, noting stable prices in Lviv and significant price drops in Odesa. She also touches on how the secondary market impacts primary sales.
• [00:13:32] Price vs. Sale Analysis - Unanyan explains a graph showing the difference between average listing prices and actual sale prices, with apartments generally selling at 10% below the listing price and a 20% drop in secondary market prices over the past year.
• [00:16:32] Sales Pace - Unanyan discusses the pace of apartment sales, noting that sales slowed from August 2009 to January 2010 but increased from January to March, with a gradual rise continuing.
• [00:25:10] Shift in Demand - Anna Anisimova highlights the shift in demand from larger three-room apartments to smaller two-room units, driven by buyers seeking to save money and reduce risks due to economic uncertainty.
• [00:27:06] Ready-to-Move-In Properties - Anisimova notes that apartments with renovations and furniture now make up about 10% of sales, with demand for ready-to-move-in properties increasing as buyers prefer quick move-in options.

Agenda (in English):

BLOCK II "Challenges of modern development: policy and forecasts" 12:30-13:00 Registration and welcome coffee break

Agenda (in Ukrainian):

ІІ БЛОК «Виклики сучасного девелопменту: політика та прогнози» 12:30-13:00 Реєстрація та вітальна кавопауза

Transcripts:

1o am Session Transcript:

 Oleksandr Chervak: [00:01:18] Let's move on to the speeches from our speakers. Business protection—can you join us? You can contact our staff for details. There are certain attendance conditions, but we will be happy to see you at this event. This is our traditional event, which we have been organizing for the third year in a row. In general, you can check the calendar and the announcement of our events, which are approved for this year, in the lobby during the coffee break. There are banners where these announcements are posted. We have many open, public events, so anytime you're interested, you can join our niche construction events, broad construction events, developers, or technological contractors. So, please, we will be glad to see you at our events.

Colleagues, before we move on to the speakers, I would also like to give the floor for a welcome speech to Casey, the director, for contact. This project, contact and projects, excuse me, contact are partners of today’s event and co-organizers. We are glad to have such a reliable partnership.

[00:03:37] As for the purpose of today’s event, the goal is to demonstrate the current state of professional and practical training for future specialists in the construction industry, to identify the challenges in the system of professional education and retraining of young specialists, and to explore how business can contribute to overcoming these challenges. The role of business is in shaping the professional competencies of future workers. We will discuss partnership opportunities in forming these competencies, and the collaboration between vocational education institutions and the labor market to achieve the common goal of overcoming the talent shortage and creating opportunities for young professionals to grow.

We have an interesting presentation today. By the way, the Deputy Minister of Infrastructure was supposed to attend, but she will join us later during the third part. They were very interested in the presentation of this event, and I appreciate the project that shared their insights. I believe they will have comments, which we will definitely share with our colleagues. Now, I would like to hand the floor to Mr. Dmytro Zavhorodnyi, Deputy Minister of Education and Science of Ukraine.

Dmytro Zavhorodnyi, Deputy Minister of Education and Science of Ukraine

Dmytro Zavhorodnyi: [00:04:54] Good morning, everyone! I am very happy to be here today. I try to attend events where business representatives gather. Recently, I was at a similar event related to energy businesses. I hope to be invited to some agricultural events as well. Feel free to introduce yourselves to me or send me personal messages. I am very open to communication with businesses. Now, let me explain why I find this so important.

At the Ministry of Education, over the past year, we have resumed investing in vocational and technical education, and I hope we will continue this next year. We have many projects funded by the Ukrainian state budget, using taxpayers' money. These include updating workshops, building shelters in educational institutions to ensure they can open, as well as repairs and equipment upgrades. We have many partners who are helping us and funding similar projects.

Our main focus is on infrastructure—updating workshops where students can learn modern skills and professions, or offering short-term programs for adults to quickly re-enter the labor market. We hope to continue investing in this direction, as maintaining this pace is crucial. Based on my calculations, it will take about 20 years to ensure that we have modern educational institutions. If we continue investing at this rate for 10 years without interruption, we will see significant improvements across our network: modern workshops, insulated facades, replaced windows, and decent conditions overall. This is a very long-term perspective, but we are moving forward and trying to do this as efficiently as we can. As you can imagine, at the Ministry of Education, we often lack the physical capacity, for example, the manpower to analyze all the options and choose the most effective ones.

[00:07:03] That’s why, in my opinion, we make many mistakes. But we are genuinely trying to do our best. We perform much better when we involve our international partners. I hope all of you are familiar with what the project is doing. Maybe, let's ask: who doesn't know what this project is doing in Ukraine? Oh, great! Everyone is familiar. In my view, this is one of the best examples of our cooperation with international partners in the field of vocational education, as it brings together many different components. The institutions involved in this the project, in my opinion, is one of the best in Ukraine, with excellent directors. It helps them update their programs and teaching materials, involve businesses—essentially everything that needs to work effectively. We are trying to spread this experience beyond the project itself and beyond the list of activities it includes. We are gradually moving in that direction. I have decided that the year 2019 should be the year of business collaboration for the Ministry of Education in the field of vocational and technical education. In my opinion, this is crucial, a very important step that we must take. I believe we need to invest much more time and resources into this than we have so far. We are now looking for people to expand our team, specifically for this direction. We are seeking ways to find these people so that we can recruit more of them and build quality partnerships with businesses in every sector, hearing them out and establishing collaborations with specific educational institutions across the country.

Dmytro Zavhorodnyi: [00:09:05] There are several important aspects that we want to focus on and work on next year. The first is the number of various joint programs with businesses—dual education programs, professional internships, internships for teachers and students, organizing practical training, and so on. Unfortunately, if we look at the average across vocational education institutions in Ukraine, and even across educational institutions in general, it seems that we are not even close to the European level in terms of the amount of practical training in enterprises or real-life dual education programs. There’s a cultural divide here: people view internships as something they have to do for the state because it provided them with a scholarship, so they must "work it off" in the summer by doing something, somewhere. It’s a very Soviet-era perception. This is the first outdated mindset we need to address.

We plan to tackle this as part of our career orientation in schools and in educational institutions to explain to children and parents that internships are a vital part of the educational process. The second important aspect is that, and I’m not referring to you personally, but many businesses I’ve spoken with about organizing internships or dual education often say, "Look, we’ve calculated it, and it’s not profitable for us." Essentially, students can’t produce enough for the company to justify paying them a minimum wage or covering the cost of their internship.

Dmytro Zavhorodnyi: [00:10:51] In other words, it's not profitable for us; we’d rather hire adults and train them in two weeks, and so on. Speaking with foreign companies, especially with their representatives from other countries or while visiting those countries, I’ve come to understand that internships in European countries are not organized for businesses, but by businesses for students. I understand that these are not the best times for social responsibility since everyone is focused on supporting the Armed Forces, which is, of course, the top priority. But I’m trying to highlight the difference in approach. What is an internship in Europe? It’s something companies organize so that students can gain their first work experience. It's like a gift to the students, allowing them to obtain their initial work experience, which in turn motivates them to study better, understand which subjects they need to learn and why, realize their career prospects, and determine which companies they want to work for and in what roles.

Ideally, they should experience this during school, then during internships while attending college, and later through internships or dual education programs during university. By the end of this process, they should have accumulated at least one full year of work experience across different roles and companies. This would make them much more attractive to employers and much more motivated, with a clearer understanding of the system they will work in. I believe that if we could bring about such a cultural transformation in Ukraine, it could lead to more people being employed in their field of study.

[00:12:50] You’ve probably all heard that the Ministry of Education has been conducting a graduate employment monitoring system for higher education institutions for several years. We have quite low official employment rates overall. But if we look at employment rates specifically in the field that people graduate from, the statistics are even more dramatic. There are unique specializations where people do indeed continue to work in their field of study, but this is mostly not the case. I believe this is partly because, by the time they graduate, the vast majority of students have had little to no real practical experience in the field or profession they were trained for. I think this is something we can start gradually improving, particularly in the area of internships, dual education programs, and practical training.

It wouldn’t be fair for me, as a representative of the Ministry of Education, to simply say, "Come on, friends, help us out, organize internships, and pay for them. You’re construction companies; you can afford it." I think that would be inappropriate, although I wouldn’t object if you did. We have many international partners, from the Swiss government to others, with whom we are discussing this. In general, within our international community, the issue of labor market development and workforce development is becoming increasingly important. This issue is now part of the overall macro-financial aid strategy for Ukraine.

Dmytro Zavhorodnyi: [00:14:48] For Ukraine to be successful economically, we need to increase labor productivity, the number of officially employed people, and those engaged in the labor market. This is becoming a critical part of overall international aid efforts. A lot of money is being invested in this, and even more will be invested in the next five years—this much we know for sure. These funds are already guaranteed by several major countries, and these projects will continue. I bring this up because, at the moment, we don’t have a clear answer as to how we can use these funds to develop a culture of internships, practical training, and dual education in Ukraine.

To clarify, we don’t fully understand, for example, whether offering grants to businesses (e.g., $10,000 per year if a business organizes internships for a group of students) will lead to an increase in the number of such internships. Or are there other barriers that prevent companies from doing this? Are there legislative barriers? For instance, in construction, many professions are classified as hazardous or borderline hazardous. Obviously, we want students under 20 years old—those still studying in vocational, technical, or higher education institutions—to have the opportunity to work, gain practical experience, or study in dual education programs while working.

[00:16:46] Perhaps we need to make changes to the legislation for this. The Ministry of Economy is preparing a new Labor Code, and everyone is very open to solving this issue. I believe our project could help here as well. If any of you want to get involved in this and make changes in Ukraine so that students can gain practical experience earlier, you could recruit entire groups for real education or internships. Not to exploit them as cheap labor but to give them that first practical experience, so they can study better and eventually increase the number of employed graduates. At the same time, businesses could receive certain benefits from the state, such as subsidies, or we could remove existing barriers. Or, perhaps, we would better understand where we need the support of international partners.

If this interests you, please reach out to us. This is a very interesting topic for us, and it’s exactly the direction we want to move in over the coming years, where we already have some consensus. Another important area of collaboration with businesses is creating supervisory boards for educational institutions. You may have seen my colleagues already starting to work on this in the field of higher education. Supervisory boards are being introduced through a pilot project, and we hope this will expand to other higher education institutions, giving them more authority.

But speaking about vocational and technical education institutions, we also want to implement such tools as supervisory boards in these institutions.

[00:18:35] Here, I would say...

Dmytro Zavhorodnyi:
[00:18:37] This will happen gradually. I would like to start with those educational institutions where we know we have great opportunities and significant investments.

[00:18:52] Let me share a bit more about this. Along with several.

Dmytro Zavhorodnyi:
[00:18:57] We are working with major banks, such as the European Investment Bank, the German Bank, KfW, as well as with governments from countries like South Korea, Belgium, and France. We have more than ten large-scale projects under a code name "Chance." The goal is very simple: we want to select one educational institution in each region, to begin with, where we can make a significant investment—not over 10 or 20 years, with small sums like 20-100 dollars per month—but with a one-time investment of 7 to 10 million euros. The idea is to create an example of what a modern vocational college should look like. Currently, we have twelve such projects.

[00:19:54] Thirteen projects, to be exact. We are still in the process of selecting some institutions. But in most regions, we’ve already chosen an educational institution that will receive a large amount of money for its infrastructure transformation. This institution will have modern dormitories.

[00:20:13] Modern workshops. Unfortunately, not everything can be renovated with these funds. It might seem like 7 million euros is enough to build anything, but on average, a vocational education institution, including the dormitory, occupies about 10,000 square meters.

[00:20:28] These facilities often don’t meet safety standards, and the buildings are in poor condition. Unfortunately, this amount of money is not enough to turn these institutions into something like the Ukrainian Catholic University.

[00:20:45] But it’s still a significant sum. Among these projects, there will be examples of construction-focused institutions. Moreover, we want to focus on specific areas of expertise in these projects. Quite often, when you visit educational institutions, you see a mix of different programs—chefs, hairdressers, builders, and more. There’s still a bit of a mixed approach. Here, we understand that over the years, during this transformation, we should focus on specific areas. Some will be focused on construction.

One example I can give is the construction college in Chernihiv, which was damaged and destroyed by the war. It will be rebuilt with the help of Belgium and France. It won’t be a 10-million-euro project, but...

[00:21:45] It will be enough to demolish the main academic building and construct a new one.

[00:21:51] By the way, even the idea of demolishing the old building and constructing a new one...

[00:21:55] This is something we are working on.

Dmytro Zavhorodnyi: A Supervisory Board of employers from their region was formed. For example, I am sure there are builders working in the city of Chernihiv or those who provide jobs in all the construction professions that can be trained in this institution, who could form a small local supervisory board, including representatives from the city and the region. I don’t know about other stakeholders, such as NGOs, to ensure that the concept proposed to us by international partners, the millions that will be spent, and the results achieved in this city will correspond to the needs of all these people who could form this supervisory board. The same applies to the city of Dnipro.

Dmytro Zavhorodnyi: The same in Chernivtsi. The same in Uzhhorod. Many places. In Kolky, in the Volyn region, for example, it's agricultural. That is, I hope that such projects will increase. We already have several in the field of agriculture, and we hope for more. We don’t want them only in agriculture; we want them in various sectors across the country, such as transportation, with the best institutions, a few construction, agricultural institutions, and others that could become magnets in their regions and serve as examples of how things should look.

It seems to me that business involvement in educational institutions gives them an extraordinary boost. Last year, when we invested in workshops in educational institutions from the state budget, we collected applications from educational institutions. And it was clear. The difference was colossal between the applications that won and those that, for example, were not financed.

Oleksandr Chervak:
[00:00:00] At the vocational school level, we’ve partnered to create and launch a pilot project for a construction hub based on a vocational education institution. This will be a comprehensive format. We are currently discussing this with our Finnish partners, particularly the 2020 project, which focuses on workforce development and human capital growth. We are open to collaboration in this area with the Ministry of Education and other partners. One of the most active projects in workforce development for vocational education, including construction jobs, is the SAP project and the Contact organization. We will consult and involve everyone, and we are actively seeking a foundational educational institution willing to focus exclusively on construction—not a mixed or general one—so that it can serve as a pilot project.

When we dealt with reforms in social infrastructure, there was a fear that focusing on a single sector would create a monoculture. But in reality, constructing something new or renovating a dilapidated, unsafe building that no longer meets modern design standards is essential. For example, when discussing school projects, building a new school costs around 2 million dollars, or 20 million hryvnias. Now, if we look at rebuilding damaged schools, the budget often comes out to around 10 million. So, let’s rebuild the old school in Kyiv that we remember—without foundations, with minimal shelters, and so on. From our side, we will certainly support such initiatives, consult, and join the process with you. If there are any comments, feel free to share them now or during the discussion, whichever is more convenient.

[00:02:04] Colleagues, I’d now like to hand over the floor to Yuliya Epifanova, the Deputy Head of the SAP Project. She will tell us more about the project, focusing on private sector involvement. There was a question earlier—who knows about this? That’s great. But do you know everything about this project? Do you know enough about it? I know that not everyone admitted it, but there are many business owners here who may not have heard much about the project. Now is your chance to learn more. So, Yuliya, over to you. Thank you.

Yuliya Epifanova, Deputy Head of the Project, Head of the “Private Sector Engagement” Direction, EdUP Project

Dear colleagues, no one really raised their hand, but I think I may have been shy because there are new faces and maybe someone has heard of us, but now I will be happy to present our main activities of the project in Ukraine. And I will be glad if this gives you some additional ideas for cooperation. So, our project has the full name Public-Private Partnership for Improving Vocational Education in Ukraine. I will say right away that the peculiarity of our project, the biggest peculiarity, is that it was initiated by business and its expansion is initiated by business. And the new professions that we develop are initiated by business. And this continues, and we are very happy about it. This means that we are in constant communication between the public and private sectors. What exactly is the name of our project? Here is some general information. The project is being implemented with the financial support of the Swiss Agency for Development and Cooperation by Gabriel Trading. The Ukraine Society is the private companies that support it.

Yuliya Epifanova: [00:03:56] The project is implemented by the Swiss Foundation for Technical Cooperation and Development Contact with the support of the Ministry of Education and Science of Ukraine. To date, the project has already entered its third full-fledged phase. The first two were about a single profession. We were developing, Technical Education was a pilot to some extent. Now the project has expanded, and we are working now. What will happen tomorrow? We suspect that it will be increased. But we are currently working with six areas of construction. These are plumbing, welding, electricians, lifeguards, tilers, facade insulation, and concrete. This is very true. I'm just naming it, because each of these names hides many, many more professions. Currently, there are 10 vocational education institutions participating in the project, absolutely represented in all regions of Ukraine - East, West, North, South, and Center. We work with the entire geography. The main goal of the project is first and foremost. The student is the main center. The goal we are striving for is to create such learning conditions for the student so that he or she can obtain a professional qualification that will enable him or her to find the job of his or her dreams. At the same time, the employer will be fully satisfied with their skills and knowledge. This is our geography. Basically, what I said, we are now represented in these cities. Our project institutions. Today, representatives of 12 project institutions are represented here. In the hall. What we do is very brief. We currently have five areas in which we work. The first area is expanding the educational offer. What it means in mind. We are working with the development of professional and updating professional standards for construction professions. Development of short-term courses together with business. Training adults from different groups who need such training.

Yuliya Epifanova: [00:06:03] The second area is new approaches to learning. This is everything related to educational materials. Of course, we will collaborate with businesses to help update the vocational education process. Involvement of the private sector. In fact, this is the direction that permeates all the others. Here I want to focus on what Mr. Dmytro said about supervisory boards. We have this issue in the project, and we are planning to actively address it. Starting with the new calendar year. We are currently conducting this kind of information reconnaissance of this institute. What is there, what are the problems? We are preparing and planning to jump into this very promising field in the new calendar year. Organizational development of institutions is a close cooperation with the administration of institutions, because we understand that the success of institutions is a team, a director, deputies, the staff of the institution and all structural units that must work like clockwork. This is really very important for this system. Another very promising area that has emerged this year is infrastructure and support for the vocational education system. We currently have ten pilot institutions. You can see their geography, where the project provides infrastructure and support for 12 months to ensure that the institutions continue to train workers for the construction industry. Despite the very difficult situation, you can see that most of the institutions are located on the line closest to the front line, so they need support and infrastructure the most, so that they can continue training for themselves, for companies, for employers. What do you mean by that? What kind of infrastructure is it? What kind of support? We update the storage facilities, make them suitable for continuing education. We are insulating the facades, installing solar panels so that there is a continuous learning process.

Yuliya Epifanova: [00:08:08] And, of course, one of the elements is an inclusive infrastructure so that you can go down to the storage facility and enter the institution. These are our pictures. I added this to the presentation on purpose so that you don't think I'm just telling you. In fact, all this is happening. These are not stock photos, this is us, this is the business, these are our students, these are our teachers. We teach together with We teach children about business. Together with the teachers' businesses, we organize excursions to production sites. I know that there are already business partners here who are actively involved in organizing such excursions. This greatly affects the motivation of students. Believe me, then they come to these companies and stay in the profession. And the final slide I would like to conclude my informational presentation with. An informational presentation is a kind of a preview of the research itself. There is a kind of cycle of professions. We are not claiming that it is absolutely correct, it is very flexible in fact. But when employers have a certain need for personnel or new labor functions, it is not always, as sometimes people think, just a matter of giving equipment. And that's the end of it. This is a very complex systemic process. This includes the development of professional standards, educational standards, curriculum development, educational materials, improvement of the material and technical base of institutions, practical training, teacher training, career counseling for students before their first job. On-the-job and direct mentoring. Attractiveness of professions under. Increasing the prestige of professions. All of these elements are points of contact, of cooperation between business and education. Absolutely everything in each element can be used by business, and it is probably even desirable that it cooperates in the field of vocational education.

Yuliya Epifanova: [00:10:10] Today is highlighted in yellow. We will disclose the maximum information about practical training, and I am pleased to hand over to my colleagues, and what will we talk about? What are the challenges in the vocational education system today in the area of practical training? How do employers view practical training? And in general, do we have a chance to improve this point of contact between business and education and make it really successful? Thank you very much. I hope the next part will be very interesting.

Oleksandr Chervak: Thank you, Ms. Yulia! When will the most interesting results of the research prepared by your colleagues be available? From the Ukrainian Marketing Agency. Association, I'm sorry, but marketing? In construction, we have a well-established expression that if a person is not engaged in his or her skilled profession, and we are not talking about a handyman, then he or she loses skills in general and needs to be tightened up a bit, hemmed in, and restored. And this is not so easy to do. And these are the challenges we face because we are in the third year of a full-scale invasion. There are wars, there are a lot of soldiers. Among the defenders there are builders who, after completing of the war will obviously want to return to their profession. And they were faced with the fact that they were. And a lot of time has passed, they have not been doing their job. That is, we will have the issue of not only retraining and training new ones, but also raising the qualifications, retraining those who will return from the front and will be as fit as possible. And we will try to integrate everyone into the economy, into work, and so on. Question. What proportion of managers, executives, and business leaders are currently ready to take on internships for students in general. What is the readiness of educational institutions to train future professionals? What challenges do they face and how can modern approaches to organizing internships at enterprises affect this? What difficulties do employees of enterprises face when working with students? What opportunities exist for inclusive education, particularly for students with disabilities? Iryna Lylyk, President of the Ukrainian Marketing Association, will tell us today and present the results of the study.

Oleksandr Chervak: [00:12:43] Ms. Lilyk, you have the floor.

Iryna Lilyk, President of the Ukrainian Marketing Association.

Good afternoon, dear colleagues! Good afternoon! Thank you for inviting us to present the study "The current state of vocational education students' vocational training in construction professions". I want to say that it will be not only me. We will be together with Ms. Olena Buchynska. As an expert of the Ukrainian Marketing Association, she will present the results of our research. And I would like to draw your attention to the title of our study. The second part of the title is the view of employers, craftsmen, and applicants. That is how we conducted this research. This is a method 101, where we asked about the same problems from different perspectives. That is, we asked employers, we asked masters, meaning masters who teach students and vocational education applicants, and, ultimately, the applicants themselves. The study was organized by the Swiss Foundation for Technical Cooperation for Development Contact. The executors are the Ukrainian Marketing Association. It is no coincidence that we are here, that we have engaged in this research, because we are always researching what is happening in the education market and the labor market. In general, our association has a task to bridge this gap between what is taught and what is needed in the labor market. We have done a lot of research in dual education.

Iryna Lilyk: [00:14:34] This is true for Mr. Dmytro. We are the ones who initiated individualized education in Ukraine. And so, when we were offered to conduct such a study, we took part in the tender, and we were happy to do so. The study was supported by the Ministry of Education of Ukraine and the League of Masters. I would like to thank the League of Craftsmen, which gave us the opportunity to reach out and really get the information and opinion of craftsmen in the enterprise, in the company. Research methodology. First, we studied the issue by conducting desk research and then qualitative research. That is, we talked to people. It was done over the phone. We talked to people on the phone. That is, we conducted in-depth interviews, asked questions of the applicant, the employer again, and the masters of educational institutions. We talked to them, and then we conducted a quantitative study. This is really an all-Ukrainian study. That is, it was done with great enthusiasm, with a large sample. We did it in the 1990s. I see, I'm sorry, what is it? Something is happening on your computer, it's something on your computer. With a fairly large sample of research. First of all, it was in different regions, that is, we were. In different regions of Ukraine. And the 20 respondents are the ones we talked to in the in-depth interviews and the quantitative survey are, well, I think, almost all of them, thanks to the Ministry of Education and Science of Ukraine. We had the opportunity to ask almost all professions that are generally related to the construction industry. We received responses from more than two thousand students, more than 2 thousand teachers and 100 companies related to the construction industry. Could you tell us a little bit about what these representatives look like? Right.

Iryna Lilyk: [00:17:10] The target group means teachers. If we look at the website, there are 22 men and 22 women. These are quite professional, I would say, pedagogical workers with almost ten years of experience. Most of them have more than ten years of teaching experience. As you can see, they represent almost all regions of Ukraine. If you look at the website, you will see that the problem of the construction industry is reflected here. Here, 90 percent are women. And this is because the construction industry, unfortunately, is an industry that is not traditionally represented by women. This is. If you look at the ages, it ranges from 10 years old to over 20. Of course, these young people were the basis of the study, so to speak, precisely because they are studying in vocational education, in vocational training. If you look at the employers, it is probably more

It's interesting. Men and women here, you can also see that women make up 90 percent of the construction industry. Traditionally, women are not represented. But I know that there is a lot of work in this direction to overcome this. Belonging to the construction industry is 20 percent. We also talked to mentors, owners, and managers. And people who cooperate, who are mentors. They are also experienced and mostly have more than 20 years of experience in this field. But these are the most interesting. Figures I, as the head of the association, could make a lot of recommendations, but you have to draw your own conclusions. So, thanks to the leagues and thanks to the fact that we are active in the research market. We surveyed 100 companies.

Iryna Lilyk: [00:19:38] This is, I want to tell you, a very good excellent result. And now pay attention: out of these 100 enterprises, one hundred and twenty-one enterprises cooperate with vocational education. Out of these 100 companies, only 20 are permanent practice sites for vocational education. In addition, we found 90 to 100 companies that told us that yes, they hire vocational education graduates. We believe that if they hire vocational school graduates, they have the opportunity to assess the level of professional practical training. That is why we also interviewed them. That's why they are ours. Ours. Our answers. That is, satisfaction, dissatisfaction, problems, and so on. They will be based on what we received as a result of a survey of 101 enterprises. 101. There are 101 construction companies that cooperate, and 10 more that hire everything. Then you think for yourself. And it's all honest. So, now I also want us to understand what we are talking about, how professional practical training takes place, and therefore how professional practical training takes place. Professional practical training takes place in an educational institution. Vocational practical training is practically carried out by an apprenticeship master. He can do it in laboratories, i.e. directly at the educational institution, and he can also do it at the enterprises using various methods. You saw a tour there today, for example. That's fine. This is one part of vocational training. The other part of the vocational training is the internship. This is when students go to an enterprise. There must be a mentor from the company who teaches them from the people who have come to learn from him. Yes, this is professional practical training. And now let's look at the generalities. That is, here are the general factors that affect the level of vocational education and training of vocational students.

Iryna Lilyk: [00:22:21] The views are from three angles. We have them. Well, this has all been systematized. I would suggest that you first look at the views of, so to speak, adults, i.e. representatives of enterprises and pedagogical representatives. And if you look at these answers, you will see that one of the most important factors is generally what people go through. Internships at the company. This is the most important thing. In general, the very fact that students go to enterprises and do their internships there is the most important factor when they speak. Then this factor affects their professional and practical training, and then the material and technical support of the enterprise, the qualifications of teachers, the qualifications of mentors at the enterprise, and so on. Then I don't know, maybe Olena will say this as well, but I want to draw your attention again. During the research. We have a fact that impressed us. I would say that when we talked to those enterprises that cooperate with prof. Tech. Education, they said: "Of course, we have the material base, but when students come to us, we try to teach them on modern equipment. And this is extremely important. Despite the fact that, as you can see here, the material and technical support of the enterprise is not in the first place. And now let's look at the factors through the eyes of the students, i.e. children, i.e. applicants. And you can see that the personal qualities of the instructor at the educational institution and the mentor at the enterprise come first. Everyone is human. This is the most important thing that affects the applicant, that determines his or her future professional path and that ultimately determines his or her qualifications in the future.

Iryna Lilyk: [00:24:39] Of course, we could not ignore, not take into account the factors of the external environment and the impact of the war, not even a full-scale invasion, but the impact of the war. It began, as you remember, in the fourteenth year and then the covid, then the full-scale invasion. Today, our vocational schools are in very, very difficult conditions, I would say, difficult conditions. Once again, this is about teaching practical skills. We are talking about professional practical training, professional practical training in institutions that are located where there is bombing, where they are not even allowed to conduct offline research. Offline classes are offline. It is very difficult. We asked them how do you get out of this situation? This is a challenge for educational institutions, a challenge for students, a challenge for companies. We need to find some solutions today,

to find some solutions in order to train specialists for the construction industry, for the construction industry. Well, you see, this is where the student comes in. Because of the war, we had almost no opportunity to study at the school. It was the master of industrial training, the fact that children were scattered all over Ukraine, and this. Right. And the deputy director of the educational institution said that it is very difficult to find a practice base today because companies are moving. I mean, it's understandable. I mean, once again, I just want to say that the situation is very difficult today. And I would like to turn the floor over to Ms. Olena, who will tell us more about the results of the survey.

Olena Buchynska, Expert of the Ukrainian Marketing Association

Good afternoon! Greetings to everyone! Thank you for the opportunity to take part in this interesting research. Why is it interesting for us? Because, as my colleague Ms. Iryna has already said, we did cooperate in the area of dual education, we were involved in the implementation of a pilot project.

Olena Buchynska: [00:27:02] And, let's say, this was the only experience when we faced vocational education. So we would like to thank the organizers, the initiators, for giving us the opportunity to look at vocational education from a completely different perspective. Let's move on to the results. Yes. The organization of on-the-job training is indeed such an important component of the training of students in vocational and technical education. According to the results of the study. The vast majority of the time allotted for on-the-job training is spent by students at an educational institution. So what do they do there? Well, first of all, the emphasis is on demonstrating and practicing work techniques. At the enterprise, this happens much less often. And there, the emphasis is still on more complex and complex work. Iryna Viktorivna has already touched on this issue a little bit, but given the situation in the process of particularly in-depth interviews, because one interview lasted from half an hour to an hour. And this allowed us to see the problem from the inside, to find out such, let's say, more important details than a quantitative study could have given us. Yes. And indeed, the fact that they were held in the spring, so it's not yet this academic year. Many, about 20 percent, talked about synchronous and online learning. Just think about it. That is, studying at a vocational school takes place online, and on-the-job training also takes place online. That is, again, these are huge requirements for apprenticeship masters, which, for example, some people say that I

I feel like an ace, I can show everything with my hands, but I can't go to the camera to shoot a training video, for example.

Olena Buchynska: [00:29:12] Well, I can't do that. There was one. There was a master of industrial training who told us that he said, "I've already bought three cameras, I've already cleared a place for myself. I've been mentally preparing myself for several months to be as digital as possible. And we have to understand this. There are cases where there are really enthusiasts in their field. In fact, I'm proud to live in a country where there are people who organized on-site workshops in violation of the law. They rented a garage somewhere and worked with students there. And this is really a very, very decent, worthy story. And this is not an isolated case. If you look at the numbers, you can see that basically two groups of respondents, both craftsmen and students, have the same assessment of the organization of apprenticeships. That is, in laboratories and workshops, we have a little bit of a difference in terms of the fact that students said that they spend almost twice as much time at the workplace. But here I would like to emphasize that, unfortunately, the students were all young. Not everyone understands the difference between on-the-job training at an enterprise and an on-the-job training at an enterprise. So maybe that explains the difference in percentages, but in principle the trend is the same. As for the forms of on-the-job training at the enterprise, in addition to what I have already mentioned, which is the development of complex types of work, workshops and observation classes also prevail. Ms. Iryna mentioned that enterprises do provide an opportunity to work with new equipment, but, you know, not always at once, as they say.

Olena Buchynska: [00:31:15] That is, classes, observations, they still precede this process. This is when students simply observe how experienced professionals do certain activities. Yes. And then they have access to workshops, which they rate, of course, much higher. They find it much more interesting. It is always interesting to do something with your hands. And here, again, we see almost parity, a picture that cannot be said about a very interesting question, in fact, which causes a great deal of disagreement. And it probably shows how differently adults and young people generally look at the world. Thus, when answering the question about the need for educational materials, you can see that everyone

They are not so much retro as conservatives. Representatives, teachers. Yes. I mean, these are textbooks, these are models, these are stands. It's a very painful topic. Always with materials, yes, with materials, starting with cases where there is only one electrode to work out a welding technique. If he says the wrong thing, I'm sorry, I think it's an electrode and one attempt. And when, again, the masters of industrial training, we had such a super case, a heartbreaking case, when the master of industrial training told us that he traditionally goes to landfills, looking for material, because they make roses there with children, and they like it very much. Well, these are welders. That is, this was also the case, and ending with the fact that there are also cases when an educational institution has the latest classroom equipment purchased with the assistance of either business or international partners, but there are no materials for it.

Olena Buchynska: [00:33:18] Well, the consumables to work on it. And it turns out that it's, you know, like a museum piece. It seems to be there, but in fact it is not. If we see it, we will look at the opinion of the applicants. Well, everything is more like that, you know. There are modern video applications, presentations. Of course, young people tend to be interactive. And here I must say that, again, for example, I was very surprised that many educational institutions use interactive technologies. And indeed, children enjoy this kind of interaction. Moreover, I want to tell you that even mentors at enterprises also say that they shoot videos, communicate in messengers, that is, they are in communication. And this is very much appreciated. And this is emphasized by these factors, as Iryna Viktorivna demonstrated, that soft skills are almost primary for students. That is, in fact, children can forgive a lot of things, but it is much harder to forgive some kind of neglect, a feeling of invisibility, because they are maximalists because of their age. With regard to the organization of internships, you can see that a little over forty to 90 percent of the applicants say that they had a mentor at the company, that they worked with a mentor. I would like to remind you that this is basically a mandatory requirement. That is, it is not a very high figure, to say the least. And out of the 100 students surveyed, they confirmed the fact that they perform simple operations, and one in five performs these simple operations outside their profession. Of course, there is interaction between educational institutions and businesses. It starts with the motivation of the company's management.

Olena Buchynska: [00:35:26] Yes, because it is still the management that makes the final decision. This is a very optimistic picture. But I want to remind those of you who have been listening that we are talking about 100 companies that are working like this. That is a very good indicator. That is, the majority of those who work, the vast majority, are still motivated. This means that they are satisfied. And they want to continue. But we also have about 20 percent. Well, nine for sure, yes, there are three. It's hard to answer. Those who said they lost motivation during the interaction. It is not always related to the applicant or the educational institution. There are cases where this is due to changes in the political and economic situation in the country. Some businesses simply close during this period. We all understand this. But if we are talking about communication, then, to return to the title of our study, the level of professional and practical training is unsatisfactory. Yes. And then there are communication issues. What about the employer's point of view, i.e. how is the internship organized at the company? Half of the respondents say that it is a full-time job. That is, relatively speaking, a student is immediately immersed in the work process. 200 is the practice of students as part of teams of skilled workers. Yes, I would like to remind you that, in principle, there can be combined options if many applicants are sent to one enterprise. To be honest, we can count such cases on the fingers of one hand. If we look at the view of the masters, the only difference is that I'm switching it up a bit so you understand what I'm talking about. Representatives of the vocational education institution, they say that some apprentice brigades also have this uniform.

Olena Buchynska: [00:37:39] Enterprises do not confirm this. Four percent against 10 percent. That is a big difference. What does this indicate? Well, it's hard to really say what it shows. The point is that who, what number of students, who perceives as a separate student team? In fact, the largest number is still businesses that cooperate with vocational education. At the time of the study, these are medium-sized businesses, small and medium-sized businesses of large enterprises that can really afford to take on one, two, or three apprentice teams, and have equipped classrooms to train them. They are very few, very few and far between. Therefore, these figures do not seem realistic. Well, in my opinion, in the opinion of our team, they are realistic. Moreover, we always have a third group. Yes, these are students who, again, do not confirm this fact. The important thing is that it is only 20 percent,

As I mentioned, they work with a mentor. And this, of course, is not enough. And, let's say, the reason for dissatisfaction, dissatisfaction from the point of view of students with internships is this lack of communication with an adult. Yes. In other words, there are not that many dissatisfied people, but there is still such a story. And in fact, during in-depth interviews, business representatives say, "Well, he should have approached me, taken the initiative. And the student says, well, I came, I was waiting to be approached, to have everything explained, and so on. For example, I remember my internship at the Kyiv Furniture Factory. And so we came and sat in this room for two weeks with a photocopier service.

Olena Buchynska: [00:39:42] Nobody came to us, and we were waiting as well. So, again, this is typical of the age. And we need to understand, we need to understand and learn to interact. And, let's say, not to look for someone to blame, but to communicate. Satisfaction with the internship. That is, you see, despite the format in which it takes place, students are mostly satisfied. That is, in conversations, children say that it is sometimes a good thing. Well, in today's conditions, this is an opportunity for additional socialization, an opportunity for communication, an opportunity to acquire new skills and to develop them. Working with like-minded people is a very big motivator not only in the development of the profession, but in general at the present time. How relevant is the work that students do during their internships? Yes, their profession. As you can see, as always, the most optimistic of these positions are, of course, teachers. They note that this is fully or partially the case in their profession. But there is always the opinion of applicants who say that, for example, yes. It happened in different ways: they cleaned workshops and unloaded trucks with gantries. Or the production manager says that he has been to many construction sites, but he hasn't seen students, he hasn't seen students who were not just laborers, that is. But there is a very important story here, and I think it needs to be told. Because, in principle, children who are again treated with respect are ready to do additional work. Many of them have said that I understand that I am part of the team. I see that other employees do the same. Well, not always something that is directly related to the profession.

Olena Buchynska: [00:41:54] And the crown won't fall there if I clean, unload, help as everyone is equal. So this is not a problem.

There is a problem when a child enters an enterprise and does nothing but such work. And they don't get anything new. So these are, you know, the two. You know, like a cornerstone. Maybe so, maybe not. And the masters of the educational institution are mostly also satisfied with the organization of the internship. Again, the problem here is that, as I said, the vast majority of practice sites are representatives of medium and small businesses, and even there we had about 100 microbusinesses. Yes, this means from the very beginning that one, two, three, well, four, five. Nowadays, they can take fewer children, they can take them for internships. And there were cases when, for example, there were only one or two children from one group. They are scattered, not across the city, but across the district. They are scattered. And we understand perfectly well that no matter how it should be, that the master visits, communicates, and sees how the trainee works at the enterprise, it is unrealistic to physically organize this. That is why, of course, this is largely a subjective assessment according to the students themselves. Satisfaction with the organization, work experience, and the employer's view. The same. In principle, the trend has been maintained. Again, we have the same numbers, plus or minus the same figures, due to complaints from the employer. This is still something that has to do with communication. Many people say that children there, for example, do not take their work very seriously.

Olena Buchynska: [00:43:51] Yes, for example, they may not come there in the afternoon, they may text their girlfriend and that's it. I mean. And again, these requirements are placed on the educational institution, which, in addition to professional and practical training, would preferably also provide some kind of communication skills and soft skills training. And in principle, this probably makes sense. In what way? How does it happen? This communication is best done, of course, with the help of mentors. That is, a mentor at the enterprise. They are really meant to be a guide to the adult professional world and to make this transition as comfortable, painless, and enjoyable as possible. And let's not forget about the benefits directly for the employer. What can motivate mentors to work with students? According to the mentors of business executives, we must understand that it really depends on the age of the mentor. Because when a mentor is young, the opportunity to work creatively, to be creative, to express oneself in this way is a priority story. When it is an experienced person of mature age, then, of course, this opportunity to pass on their experience, to prepare personnel to help them, perhaps for the future, to replace them, becomes a priority story. And not

We forget that the material component, I'm just saying it's the last one. But this does not mean that it is the last, it is in our reality. Certainly not the last, if not the first. This is an important story. As for the material reward, by the way, it is not always a monetary reward. It can be material, not monetary rewards. There have been some cases where it was said that it was vouchers and other incentives. It also means extra days off, extra vacation.

Olena Buchynska: [00:46:09] I mean, you can motivate in completely different ways. And there are different cases, but they are not common. What is monetary material reward after all? What can motivate people? Yes. Well, again, many people, like I said about the apprenticeship masters, that not all of them are ready to recycle. But I want to remind you that Ms. Iryna did not stop there. But this is important because many businesses have a stereotype that seems very wrong to me. Well, it's wrong that only people of respectable age work in the process. Yes, it is. And so, in principle, they cannot keep up with the times, as much as we would like to jump. But in our research, it was proved that there is a small representation under the age of twenty-one, but 10-21 is a lot. So this is a very authoritative sample. And there are such people. And, for example, vocational education teachers are younger. And this is a very cool trend. Therefore, the lack of knowledge of the profession and the impossibility of, say, lack of pedagogical training are not enough. Most of them call it that, like, I'm not a teacher, it's hard for me to work, let alone adapt to different psychological states, different ages, and so on. But the most important thing is that it demotivates. This is when you invest in a child Yes, I even learned the pedagogical skill of preparing some blanks, but without seeing it, the feedback is Yes. I mean, the behavior is bad. You see what goes in one ear and out the other. This is really one of the main motivating factors. Soft skills. Students would like to see as much as possible in their mentors.

Olena Buchynska: [00:48:12] This is communication skills, creativity, ability to persuade and personal approach. So, indeed, these soft skills are very important and in demand. But again, we shouldn't forget that practical training, professional training, and practical training are a kind of triad, and we can't ask much more of someone than we can of other participants. That is, it would be ideal if everyone was communicatively ready for such interaction. As for the material and technical base. 100 interviewed representatives of institutions vocational and technical education. They noted that they have modern material and technical facilities, which is actually very cool. DAB institutions have better equipment, which is logical in principle, and 100 teachers confirm the adapted premises for inclusive education. Although, it seems to me, according to the law, there should be one hundred percent. Yes, the material and technical base of vocational schools from the point of view of educational institutions. So, basically, you can see that almost all of them, well, only 100 of them are rated as negatively insufficient to one degree or another. If we compare these indicators with the indicators of institutions, partners, and guides, you can see that I want you to look at the bulbs. The fact is that the trend seems to be the same. Yes, only three to four percent are dissatisfied, but in most non-partner schools. Oh, oh, I ran to the wrong place, the ones that are not partners, yes, they have, let's say, outdated equipment, but which can still theoretically be used, What is missing? Well, there is so much food in the partner establishments. And if we compare the material and technical base of the institutions, vocational schools, and enterprises? This is really interesting.

Olena Buchynska: [00:50:42] Because we were very surprised to find cases where entrepreneurs evaluated the material and technical support of an educational institution better than their own? There were even cases where business representatives said that we knew that new equipment had been purchased there. Everyone in the neighborhood is talking about it. I haven't been there yet, but I'm planning to visit it next week. So, in a sense, we can already talk about, well, if not about the priority, but at least about the fact that we are moving. And these changes are obvious. Because the heads of educational institutions say that this trend exists, and in principle, they hope that it will develop even faster and better. As for the adaptability. Regarding the adaptability of vocational schools for practical training of people with disabilities. I have already mentioned that 90 percent are. 90 percent of them have this opportunity. Yes. But, of course, we realize that there is room for development. And this is, perhaps, the primary need. Because, as my colleagues have already said, we all understand that the process of reintegration, the return of veterans to civilian life, through education and the workforce, will require such infrastructure. We need to pay special attention to this in terms of material resources. Is the level of material and technical resources at the enterprise sufficient? Well, it is clear that, in principle, we did not expect

to get and get others. The other results are really mostly different. For the most part, it is enough. The only thing that surprised me was that two percent of entrepreneurs still said that they had insufficient material and technical base and could not conduct the practice for these reasons.

Olena Buchynska: [00:52:59] A very important question in our research was who initiates cooperation? Because in principle, again, this is another stereotype. In general, I think the field of vocational training in Ukraine is full of stereotypes. So, the stereotype is that entrepreneurs are dragged to vocational schools by the ears, argue about how they don't want to do it, but they are dragged by force anyway, and then they run away. In fact, you can see that the results of the study show a completely different story. Yes. And even teachers say that this happens quite often at the initiative of the company. There are also situations when a student finds an enterprise for internship, especially in the context of the study. This was typical of the region close to active hostilities. Many of the heads of educational institutions said, "Well, what can I do? I get calls. The parents are calling. They say that they will not let their child go to live in a dormitory or somewhere else. They want the child to be close to them. And then I said, "Please, find an enterprise in your place of residence. Even if it's in a micro format, they should send some video reports and do something. That is, these are really their approaches. He says that this has never happened before, but in this way, to this extent, and now it's a fairly popular story. And, let's say, let's say, the key question, perhaps, is one. Let's just say that one of the key issues for which the study was implemented in principle is the satisfaction of employers with vocational training.

Olena Buchynska: [00:55:02] You can see that in principle, in principle, very very cool high scores, and they are tangentially related to theoretical and practical training of soft skills. That is, in principle, 90 percent of your colleagues are not only advising you, but their results hint at the possibility of implementing this story. Why do companies cooperate with vocational education? Of course, we can tell some local stories and talk a lot about it, but because of the timing, we won't do that. We will, for example, focus on tendencies at some points. Yes. The first is tradition. Oddly enough, they may have started with

Soviet times, because it is typical for large enterprises and large enterprises that have a tradition of being a base of practice. Someone said that they used to employ 100 or 200 children. That is, there were such enterprises. Indeed, the heads of the institutions and the heads of the enterprises changed. But this cooperation continued and continued effectively. And in principle, all participants are satisfied. And the second is the ability to train specialists to meet the needs of the enterprise. This is a very important advantage. Again, this is an opportunity to grow a specialist for yourself. Well, not a specialist, but a narrowly specialized specialist. Because many of your colleagues complained about this in the course of the research, complained that it was very difficult. Let's say that someone is a jack of all trades. And it would be great if it were more detailed, specialized, so that a person could become a professional in a narrower segment. The third is young people, mostly between the ages of 20 and 20. Well, it's rather veiled, but we all understand, we all understand the current realities. So, really, this is an opportunity for an enterprise to have some insurance.

Olena Buchynska: [00:57:25] Yes, about the fact that this employee, he will be there for at least five years. But why do I say five? Because it takes two more years to turn him into a full-fledged team member, a full-fledged specialist, and to have insurance in order to keep the latest material and technical support in educational institutions. I will not stop saying this because it is true. There are educational institutions that have newer equipment and a shorter period of study, a shorter period of study. I mean, compared to the same higher education, this is a shorter period. And even those companies that are involved in the dual form of education have the opportunity to get their specialists faster. You can see what your colleagues say about this. Strange as it may seem. Well, it was really surprising to me that people who worked at such powerful, cool enterprises voluntarily go to work at a vocational school and basically work on enthusiasm, on enthusiasm. They cooperate with various enterprises and are well-known and respected people in the industry at the regional level. So, again, another stereotype to debunk is why companies don't cooperate with vocational education. Well, first of all. And the most important thing is the unwillingness to retrain. To teach like this. There's even a proverb that says it's better to teach than to be taught. And many business representatives take this position. It is very common for minors to be underage. Very often, business representatives say that, well, in principle, after 10. Okay, but here's the thing.

Not even for a short-term internship. No, explaining it by the difficulty of communication, the difficulty of working conditions.

Olena Buchynska: [00:59:41] I wouldn't advise my child to spend extra money on overalls. Well, there are also overalls. Maybe there's food, all sorts of related things. The story about your own tool is interesting, because it's also an insight. Many business representatives are upset when a tool breaks down, when a tool disappears. There are even such cases. Let's be frank, this is also one of them. Well, not that, not that, not that that denies, but an unpleasant unpleasant story Theory and the lack of a mentoring institution in the enterprise. Well, in fact, in our opinion, the absence of what the company says is an obstacle is the absence of a mentoring institution at the company is very cool. It is very cool because they understand that it is necessary and they are thinking in this direction. So in fact, it seems to me that these companies may become new partners for vocational education in the future, in the near future. This is what your colleagues say. This is how you realize that he needs to be retrained. We don't hire adults for internships. Another very important story is that companies don't want to invest in a person and then lose them. And this, for example, was a pain both before the beam and in the shop, because every second representative of the company says, "Let's have some kind of law. So, they are trained, and then, well, at least for two years, they will stay at this enterprise for three years, and we can have this guarantee. We realize that this is unrealistic, but we have to do what we have to do.

Olena Buchynska: [01:01:47] We cannot hide this information. To summarize, I would like to draw your attention to these, let's say, wishes for improving the quality of vocational education and training. Again, view 202. Yes. And when we talk about the fact that employers want to develop soft skills of students, again, I will repeat it again, it is a need for all participants in this process to increase the prestige of vocational education. Again, this is one of the biggest stereotypes. This stereotype needs to be overcome and is being overcome by such measures as we are taking now. First of all, yes, because it still exists in society to a lesser extent. But there is a stereotype that these are, say, children who had no choice, and therefore entered the orphanage from some unreliable families. But now I personally have had the pleasure of communicating with

Vocational school students who are very charged, very charged. This is their conscious choice. They also participate in some extracurricular activities. That is how I used to imagine it. Well, higher education, let's just say, is completely different. And everyone needs to know about it, everyone. And business representatives in the first place. Of course, we need to increase the practical component. But because of all these, let's say, problematic issues that we have told you about today, we understand that we would like to have more in the future, but now we have what we have. Because the limitations are really huge. There's an interesting story about the professional development of teachers at the enterprise. They say that they constantly invite representatives of pedagogical institutions to their enterprises, but they don't come. And representatives of educational institutions say that they would love to come, but no one offers them.

Olena Buchynska: [01:04:07] Well, again, the circle is closed. We come back to the issue of communication. So this is also a very important story. Students are eager to get an education. Of course, the material issue, the issue of their comfort, dormitories, equipment is a very important story. But I want to tell you that I myself have talked to children who said that receiving a scholarship is a competitive advantage for them in the process of learning. That is, there are children who really appreciate what they have. They believe that they are lucky to get this money and appreciate it. That is, we had a lot of very, let's say, holistic and bright respondents. Of course. This also includes the opportunity to earn money while studying, so that the practice is paid for. To be frank, there have been many cases where even apprenticeship masters have noted that in order to keep their own pants on and help their children, they also work on weekends, let's say, in this way, and thus they have the opportunity to purchase consumables and help students earn money. As for the teachers, of course, I have already mentioned the possibility of cooperation with enterprises, which they say is provided in full. Reduced bureaucracy and the opportunity to improve and upgrade their skills. Oh, sorry! That's it for the main results, let's say. Of course, we have 100 pages of diagrams and data of various kinds. We tried to select the most important, let's say the most important. And so that you wouldn't fall asleep, and so that it would be useful to you and, perhaps, motivate you in some way.

Olena Buchynska: [00:00:00] Influence educational programs. We can't say that the educational programs there are extremely innovative, all of them are adapted to the update. But they can have an impact. And I want to draw your attention to this little bit about short training periods. What are we talking about? Today, businesses have the right to order a professional educational program. That is, these courses are short. In order to learn about vocational education or about those who trained them. This is something you can use. Because when we talked to businesses in in-depth interviews, what did they say? Well, we've heard it, and we're not going to close it, no matter what you say. For three years, they teach what we can teach at the enterprise in a month or two months. Today, you have the right to turn to vocational education and overcome this issue. Take advantage of this. I would like to draw your attention to these 20 percent or so. Once again, we talked about enterprises that cooperate with vocational education. So, those that cooperate with vocational education are 90 percent satisfied, everyone is satisfied. Those who do not cooperate, I don't know. So once again, it means looking at new opportunities and cooperating with vocational education. This is when it comes to educational programs. What else do we have? Well, in that study? I was struck, for example, by the fact that today's apprenticeship masters don't get paid well for their work, frankly. But for such money, they are all trying to improve their professional level in the first place. In principle, by law they have to. Well, they have to take a refresher course every five years. We have hardly ever found a nail technician who takes a refresher course every five years. They take it much, much more often. The only thing that we would like to point out for the advanced training courses is that today, perhaps, masters still need to conduct such courses so that they can film this, as they say, well, this is a psychological barrier for, well, for publicity.

Olena Buchynska:  [00:02:34] I mean, we need this video. Well, it's necessary, it's necessary today, because the question is how to learn? How can I teach a welder if I don't have one? Question. Yes, and we ask them. So what? They are the ones who ask this question. How is it? I say, "Well, if, for example, a child has an instrument at home, is there someone there who can help him? So, first of all, I send a video. So he shoots a video, sends it, tells me how to do it. He shoots a video of how it's done. Then go there. I'll finish now. Then they look at the mistakes, but

There should be videos like this and like this. How do you say public videos, how do you teach? And so masters need to be taught these things. That's what it is. And this is about educational programs, about encouraging young people to enter the profession. Well, I'm actually sorry, but I'll answer this question for a minute, because this is, this is something that touched me. You see, in that study we asked the children, "How did you choose your profession? I want to tell you that almost half of them chose it from the picture. Well, their parents, well, there was that institution nearby. And then we picked someone at random. We asked them. I mean, we asked all of them separately. How satisfied are you that this will be your profession? 90 percent of those who randomly did this said that this will be their profession, their life. My bow to vocational education is a great big job. Therefore, this work needs to be done and done together with business. That's what I wanted to say.

[00:04:49] Thank you. Thank you. We have more, if I'm not mistaken.

Oleksandr Chervak: [00:04:56] Iryna Shumna, Chumak, Director General of the Directorate of Vocational Education of the Ministry of Education and Science on the motivation of vocational education institutions. Maybe you could comment.

Iryna Shumna: [00:05:08] This is not an easy question. We always say today, where did we start, who should start cooperation? What is the meaning and content? But if we are talking about the motivation for cooperation, we should approach it individually. For example, the fact that it should be him, he is the strategy for both the institution and the business is one hundred percent true. But there are different businesses. And I am grateful to my colleagues who pointed out that, in principle, we can. Today, we are cooperating. With such small enterprises, because medium-sized businesses generally cooperate with large businesses. But this is in specific, mostly city-based enterprises, because, in principle, these ties have been established a long time ago. In fact, special educational institutions were created back in those distant Soviet times to train these personnel for a particular enterprise. But to put it bluntly, even such cooperation cannot be separated from its ties to. Extremely relevant. We have to work with them. This is more of a macro level. And here we can talk about the sector's cooperation, such as, for example, with companies operating in the construction sector. I would add a little bit about standards. I am grateful to the project and, in fact, to our partners, with whom we have already worked, who have started working on standards in the construction industry. It is really not easy. We are trying now to break stereotypes a little bit, to move away from standardized hours, the number of hours that have always been provided for, and in a way even to provide for different opportunities. When we are teaching young people who come after the ninth grade, or when we are talking about vocational training for adults who, in principle, already have the appropriate base, certain skills, communication and soft skills, but we have once again seen that soft skills are in great demand from employers.

Iryna Shumna: [00:07:46] And, perhaps, it is sometimes more important for an employer that a person is able to react quickly, to relearn, than to have a certain standard of their professional skills. That is why I think that in the near future we will have new professional standards that we will develop together with you. The new trend is also called micro-qualification, because the experts who conducted this study say so. In fact, it is possible to start cooperation right now. And if you need certain specialists or to teach just some small skills in a small innovation, then in technology, this can be done by institutions right now. But here I'm criticizing vocational education institutions a little bit, and I'm not talking about the institutions that participate in our project. But mostly across Ukraine. They are used to being given a state or regional order, having children come to them, and they will teach them for three years. And, unfortunately, they have to look at what is happening in the labor market in general, and then make some forecasting, what we call it. For example, Dmitry Vladimirovich is now adding a marketing specialist to our standard staffing lists. Because today, it is not only the business department and the deputy for business that should study the market, but actually work to understand where a particular organization, in our case, an educational institution, operates. We are not isolated, and we do not live on some other planet, but we function in a certain community, in a certain space. Therefore, I think that these are also, I hope, rapid innovations that we will present in the near future in the vocational education system.

Oleksandr Chervak: [00:09:56] Thank you. Irina. I, my colleagues, will answer the questions. We literally have up to ten minutes, and I wanted seven. Let's talk about everything, everything is great, it's good, but let's be a little bit critical of the other. We have business, we have tags, and this is more about that. Tell us, what would you recommend that the project should pay attention to, what needs to be improved? What should be taken into account in the in terms of project implementation or if the business there is generally satisfied? Yes. But what could it improve on in terms of vocational education, if any? I am glad that business has paid more attention to cooperation. But what is missing? What is the business out there not listening to? And why is this important to you? If anyone has any questions, please raise your hands so that our colleagues can pass the microphone to you, and here I am, before I say why we have been talking about the curriculum for literally a year with Europeans, and with our colleagues from the European Federation of the European Construction Industry. And one of the most common questions from business to them was there. We can't help you financially, obviously, with some projects, because we are an association there that works for the European Commission and the European Parliament, but we are ready to help you institutionally. How can we help you? The biggest request from our participants was that we are going to Europe, we have to comply with European standards. We are implementing the requirements as a candidate for Ukraine, as a candidate for the European Union. And the biggest request was for us to do it according to your standards, because we do it according to Ukrainian standards, and we are completely unprepared, if we are talking about domestic business, to implement the European standards that we are rapidly adopting in Ukraine as a basic one. But as soon as the war starts, the war will be over. A full-scale reconstruction will attract donor investments, especially those from the West. The larger the loans, the less competitive Ukrainian business may be in terms of personnel and capabilities. And we lack experience in implementing those European standards. This is more of our advice to integrate curricula and the requirements of European standards in the production of materials and technologies. And here it is possible to communicate more with partners abroad. But not only there, there is still a separate situation according to the standards. Colleagues, who had a question for Yuriy, please.

Yuri Sidenko: [00:12:36] Good afternoon, everyone! My name is Yuriy Sidenko. Who does not know the director of the Univers company, which was 10 years old in the summer, a twice risky enterprise from Luhansk, then from Severodonetsk. I want to thank the leadership of the Confederation of Builders of Ukraine and the Ministry of Education for today's event.

[00:13:00] It is very important, very important. But.

Yuriy Sidenko: [00:13:06] Mr. Alexander, well, you know, I always tell the truth. Today I am a little bit ashamed that I see a large number of representatives of education at this event and very few of my colleagues from the confederation. And we have.

Oleksandr Chervak: [00:13:27] And 10 more people are online, I apologize.

Yuri Sidenko: [00:13:31] What the representatives of the association, the Ministry of these funds have been talking about today. So I want to address all the leaders of the construction industry. Dear friends, everything that was discussed today is primarily necessary for us, not even for the state, but for us. Because now there is a shortage of construction workers. You know what the problem is. And we are with you. And some of us are already doing what vocational schools should be doing: telling us what professions we need, what new materials we have, what new technologies we have. Let us, the employers, pay attention to this issue first. I repeat that we need people not from vocational education, not from the Ministry of Education, but from us.

Oleksandr Chervak: [00:14:35] I think everyone agrees on who is here and for.

[00:14:39] Who is not here. And we still had a question, please. Thank you.

Oleg Borisov: [00:14:45] Oleg Borisov, deputy chairman of the builders' trade union. Thank you. Confederation of Builders for the invitation. Thank you for finally having a vivid study that shows the real situation in vocational education. And I thank all those present for taking the time to listen and, first of all, to speak and express your position or comments. There was a lot of talk about issues, standardized hours of cooperation between employers, and so on. Just a specific example. The seventh seminar has already taken place. Example Here we are with our partners at PROBL magazine. The company is a very respected company. They have organized seven seminars on ventilated facades at vocational schools alone. The most interesting news for everyone is that as part of the preventive work today in one educational institution, thanks to Bars, this area will be actively developed and the company is moving towards the standard. This is about how to support vocational schools. This is not a project, this is not some kind of business project. It's just, as they say, an idea for three. Today, we've been joined by IT companies, flooring companies, and so on. The point is that this is the way to cooperate with all the processes and support them. They said very a lot about the fact that there is a certain difference between Well, young people want videos, and teachers want books. Yes, we also had a certain kind of cooperation. A very good one with Paton. As for not books, but posters. We simply delivered the posters, which were updated from the companies, to the educational institutions that are part of the builders' union. And the students no longer wanted the video, because they saw new posters, new information, new literature that was presented in practice.

Oleg Borisov: [00:16:21] That's an example, just like the company. Now the same thing is being passed on to posters. And to be honest, why do they want video? Well, because all these posters are outdated, and it's just a question that needs to be invested in a little bit, to be honest. A question for everyone. How much does it cost to print one poster and give it as a gift? Unfortunately, we don't have as many vocational education institutions today. We feel what is happening. This is a kind of spot support that can be provided. As for some short-term courses. A year ago, we launched micro-skills hubs based on institutions in various construction specialties. And we are moving forward in this regard. We even have an idea to organize micro-courses on ventilated facades. Because this is a trend, an example. It has been developing in the construction market for a long time, but vocational education is a little unaware of it. What is the innovation of the seminars? It's not just for teachers and students, but also for construction companies. Because we invite partners to each seminar. And now we are planning a seminar in Lutsk. Maybe Valeriy will invite us personally. We want more people to come. That's why two construction companies came to Ternopil as an example. They looked at the state of the educational institution and the way they prepare. There are already certain agreements and orders. It is in this direction. This is just an example. That's all. There is a way out, and in principle, everyone has some money. I mean, this is a variant of what needs to be done.

Oleksandr Chervak: [00:17:36] Thank you. Thank you. I have one last question. Yuriy Martyniuk We're going to wrap up and take a break.

Yuriy Martyniuk: [00:17:44] Good afternoon, colleagues!

Yuriy Martyniuk: [00:17:44] Yuriy Martyniuk, Association of Western Ukrainian Developers. I have a question for my colleagues from the Ministry. In fact, the issue of vocational education is extremely important. And both local authorities and specialized businesses are ready to work to modernize vocational education and meet the conditions of our time. But I have a question to my colleagues from the Ministry about the quality of management decisions. As of today, most vocational education institutions are owned by regional councils and regional communities. And the funding comes from the budgets of local councils in accordance with the law. In Lviv, for example, we had a rather complicated problem six months ago when the regional councils did not transfer educational institutions to their ownership at the request of local councils, i.e. the city council. So there is a kind of dualism that hinders development. We understand that mentors are a kind of direction, a kind of institution. It can be done in different ways, but when there is a certain dualism, it stumbles and does not go as well as we would like, or can it be improved at some managerial levels?

Speaker 1: [00:19:00] The city of Lviv is a separate topic for discussion. The issue of management of vocational education institutions is a little bit different from what you actually said. Today, management functions have been transferred from the central level from the Ministry to the level of regional state administrations. But indeed, there are two regulatory documents at the level of the Cabinet of Ministers that state that the level of management in the context of decentralization, and we definitely have decentralized vocational education, should be the region. Today, not all regional administrations will automatically become communal, but regional administrations in the case of transferring these institutions. And the founder there will be the regional council, which has delegated powers to the regional administrations to manage these networks accordingly. Today, not all regional administration councils communicate well with each other, first of all. I think you know this from your work as well. And the second story is that not all of them are able to maintain these networks with the appropriate budget at the regional level. The Ministry of Education and Science has developed a certain algorithm for communication and coordination of these positions between regional councils, for example, administrations and city councils. And we already have an example. For example, the city of Zhytomyr. Four institutions were transferred to five institutions, the city of Dnipro, four institutions were transferred. Therefore, where there is communication and it is effective, it works. In this case, the city of Lviv and the region. They have difficult communication. We are also constantly involved there. But this is really no excuse for the city not to allocate certain funds there, and they have various financial mechanisms provided for by the Budget Code, when can they do this? Another position is surprising, when, for example, the city of Kharkiv wants to allocate additional places for regional order, and the regional administration does not approve 200 additional places, for which it does not even pay. This is where the administration's position is surprising. But here, too, we are leading a separate communication. I'm just wrapping up our conversation, I guess.

Speaker 4: [00:21:14] Remark Maybe the ministry should think about an algorithm where the one who holds, manages.

Speaker 1: [00:21:20] We are now preparing relevant recommendations for the formation of the network, and in fact, the corresponding transformation will take place, including the adoption of the law.

Speaker 3: [00:21:34] Look, I agree with you in general. If in simple terms there is a problem.

Speaker 3: [00:21:41] We have, in addition to vocational schools, we have.

Speaker 3: [00:21:44] And also professional colleges.

Speaker 3: [00:21:46] And if, for example, in the city of Chernihiv there are five vocational schools and four colleges, and they are all full, and there are no small ones, and you can transfer something somewhere, so there will be no change there, then in cities like Dnipro, Lviv, or other cities like Odesa, where there are several dozen institutions. There, you first need to understand the concept of their optimization. That is, what will be merged with what before making decisions on these property issues. Because as soon as we, for example, transfer an institution in Lviv to the ownership of the region and another to the ownership of the city, and they are, for example, located next to each other, it will be impossible to merge them later. Well, no one will ever do that. They will just exist. That's it. There are always two different institutions. And it seems to me that it is very important to understand beforehand where something needs to be combined with something and then transferred together. This is a technical issue. But in general, I agree with you.

Speaker 1: [00:22:53] But at the same time, we have another example, when, for example, the city says that we will provide and maintain the institution only for the needs that municipal enterprises have, and they believe that business is able to provide their staffing needs on their own. So this is a rather complicated issue. We know it, we are working on it. If you have any specific needs, please, we are open, ready to get involved. And finally. Just Mr. Yuriy. He said something quite emotionally about the need for personnel here today and now. Dear colleagues, according to official statistics, we currently have one person for three vacancies. That is, today people are actually casting among employers and choosing where to go. And this is real. Educational institutions will not give birth to you, and in three years, or in a year and a half, or in six months, they will not create the person who needs to come. We need to take demographics into account. These offers of short pre-apprenticeship programs are what we need to keep in mind today. But on the other hand, there are still companies that are already thinking and realizing that the need for personnel is not only today, it will be there in three years. Therefore, it is also extremely important to establish long-term cooperation that will allow you to have good, qualified specialists after a certain period of time. Colleagues.

Oleksandr Chervak: [00:24:26] Thank you all. We are a little bit behind schedule. Thank you for your informative presentation. We are now having a discussion. I am grateful to our speakers, our distinguished guests from the Ministry of Education. Special thanks to the Kontakt Foundation for their project. This is exactly their research, their niche in this area, and so we are grateful for this work. And we are ready to support and develop cooperation in this area in the future. In terms of business professionalism and institutional support, well, 112 authorities, we are now on a break. I would like to ask you to come to the hall for a coffee break. Because we are going to prepare the hall for the second panel. The second panel will be a business panel, a developer panel. So, colleagues, thank you for your attention. I invite you to the hall. And see you at the next events. Regarding the presentation, the organizers said that they will provide an opportunity and explain to all interested participants the presentation of today's research. Thank you.

 1 pm Session Transcript:

[00:00:00] Oleksnadr Chervak: Not everyone wants to speak publicly. First of all, not enough attention is paid, which is quite variable, because. The topic of housing is housing, development. Because we have a number of factors that affect, starting with labor shortages, inflation, currency fluctuations.

[00:00:24] The increase in energy tariffs.

[00:00:28] Oleksnadr Chervak: The increase in the tax burden, which is in particular from the first of October. And that's it.

[00:00:35] Most likely, given the politics and dynamics of recent legislative changes.

[00:00:41] Oleksnadr Chervak: And this all motivates us to discuss this important topic. One of the biggest problems number one for those people who have lost their homes, who needed them. This is the housing policy of planning housing development as. What are the programs that are relatively effective in Ukraine and that can be a driver of investment stimulation?

[00:01:09] Colleagues, please do not walk in front of the cameras. Here we go. We have an air raid alert. I propose.

[00:01:21] Oleksnadr Chervak: I have to consult with you. Actually, I'm going to go off topic now. We actually have today.

[00:01:27] The hall in the shelter is booked for exactly the same number of people as it is now.

[00:01:35] Oleksnadr Chervak: There's a suggestion to advise how we can continue here and, if necessary, quickly change the location where we will duplicate everything. We, those who can, those who are willing. Nevertheless, they can take you to the shelter, they can do it in the shelter and come down. Now the hotel staff.

Could someone give me a suggestion? Essentially, it will be the same, just different seedlings and shelter. Are there any proposals? We simply don’t want to stop the event but rather continue it.

[00:02:07] In any case, those who are interested can move to...

[00:02:14] Oleksandr Chervak: ...the shelter and continue participating in our panel there. We will keep track of it regardless.

[00:02:25] What’s the situation, and we will keep you informed. So, regarding housing, we discussed...

[00:02:31] Oleksandr Chervak: ...that it’s worth discussing. There are programs and plans from developers, and most of the developers are mostly finishing the projects that were started before the war, etc. They are mostly working on project documentation and preparing documents for the future, to launch them when possible. The rules for residential construction have changed. Investments in housing construction have changed, especially with the adoption of the law on the protection of creditor rights, which essentially changes the rules of the game.

[00:03:08] For those participants who are eligible for affordable housing, support, and accessible loans...

[00:03:14] Oleksandr Chervak: We have forecasts from the banking sector.

[00:03:17] If certain categories of people do not qualify for affordable loans...

[00:03:21] Oleksandr Chervak: What should be considered? How do banks assess the future of commercial lending? How will it develop? We invited specific developers to share their opinions. But we also encourage you to join the discussion to talk about how you see this, to predict potential risks, including the biggest price risk. According to some preliminary forecasts, everyone expects that price stabilization is good, but it’s a short-term solution, especially in Kyiv, and won’t last long. Overall, price increases are predicted to be between 10% and 20%, at a minimum. This is what I want to.

[00:04:04] Let's hear your thoughts. How do you comment on this? We wanted to start our panel today with analytics.

[00:04:12] Oleksnadr Chervak: But unfortunately.

[00:04:14] Oleksnadr Chervak It will be anyway. But a little bit later, we have analytics from LUN, which is almost entirely dedicated to the primary.

[00:04:23] Oleksnadr Chervak: And what is the situation on the market, what are their forecasts, how are they, what tendencies do they see? And also we wanted to.

[00:04:30] Today we are going to talk about three programs, two programs and one initiative.

[00:04:36] Oleksnadr Chervak: Rather, there is Oselya. By the way, Oselya is two years old today.

[00:04:40] Today is worth congratulating.

[00:04:44] Oleksnadr Chervak: With a good initiative, but in our opinion, it hasn't started working yet, but it already shows such a tendency towards the Nest.

[00:04:51] Good steps. So during your speech you will be able to comment.

[00:04:59] Oleksnadr Chervak: And here is Mr.

[00:05:00] Eugene Master will be on our third part. He will comment further on his own behalf. We have an initiative called Housing for IDPs, which is coordinated and implemented by the State Housing Agency and financed by a German bank. If I'm not mistaken, we will have one of the two largest developers in general, as we believe, today. And Integral and Integral and Creator will be there.

[00:05:26] Oleksnadr Chervak: Comment on the policy, the trends they see in their policy. How do they influence it? What do they emphasize and invest in? Share your experience. We can discuss it. And of course, today's.

[00:05:42] Our financial partner in general of our business event and our reliable partner in general in CB Globus Bank a little bit.

[00:05:50] Oleksnadr Chervak: Talks about the commercial mortgage market. It is not available to the state, but to the commercial one. What to expect, what to pay attention to. Our lawyers will also be present. The Chairman of the Committee on Legislative.

[00:06:06] Olga Sydorchuk, Head of the Committee on Legislative and Regulatory Activities, will comment on the issue of construction in terms of.

[00:06:15] Oleksnadr Chervak: Recommendations of the diaspora. A recent memo was issued.

[00:06:17] For developers, for contractors on commissioning, obtaining permits, compliance with fire measures. Comment.

[00:06:26] Oleksnadr Chervak: These are the questions. We asked.

[00:06:27] And also to comment on some of the implementation techniques.

[00:06:34] Oleksnadr Chervak: The new law.

[00:06:35] Registration of monitoring of future real estate objects. And actually within the framework of the new rules of the law on the protection of creditors' rights. And a little bit for that.

[00:06:50] Oleksnadr Chervak: Olga will touch on others.

[00:06:51] Initiatives that we announced at the municipal level. That's all we're going to talk about today. And that's why we want to hear more.

[00:07:02] Oleksnadr Chervak: An additional task from you. For us and for other participants in general, to take into account what, what else is needed from a business point of view, what to pay attention to, what to change so that we really stimulate.

[00:07:18] This question was facilitated.

[00:07:23] Oleksnadr Chervak: Would you like to see an increase in the growth rate of new construction projects? Because at the current pace, we believe that we are in a situation where there will be less supply and demand will be insane, it is already postponed, and.

[00:07:40] Supply will not be enough. And this is an additional criterion that, of course, can also affect the price.

[00:07:46]  Oleksnadr Chervak: [00:07:40] And so as not to level any later.

[00:07:50] What state initiative on affordable mortgages, in particular. So, colleagues, I propose then.

[00:07:58]  Oleksnadr Chervak: Let's start with our birthday people.

[00:08:00] The Housing Foundation. Andriy Tarasenko about the program eOselya.

[00:08:06]  Oleksnadr Chervak: And about the new rules.

[00:08:08] And making changes to it. About the forecasts. And some possible insights that we don't know, but which are being prepared.

[00:08:21]  Oleksnadr Chervak: So, Mr. Andriy, you have the floor.

[00:08:26] Andriy Tarasenko: Thank you, Alexander.

[00:08:27] Thank you for the greeting. Hello, everyone! Yes, it really coincided today.

[00:08:33] Andriy Tarasenko: eOselya.

[00:08:34] The second anniversary of the program is two years. Two years flew by like two seconds. The path was not so easy. You can do it this way or that way. Yes. The path is not as straight as it's shown in the picture.

[00:08:58]  Andriy Tarasenko: But now I would like to talk more about.

[00:09:01] Results and opportunities for today and plans for the future. Yes, the program was launched on October 1, 2019. On October 10, we issued the first loan, and in.

[00:09:17]  Andriy Tarasenko: January of the following year, we celebrated the first million. Then there were.

[00:09:23] Accomplishment that is relevant to the public Today.

[00:09:27]  Andriy Tarasenko: This is the first loan issued on a chervonka. It was actually not so long ago, a little over a year ago. And today, more than 100 families have already received an apartment in the program and the whole program has been financed.

[00:09:42] Housing for more than 21 billion hryvnias. And if we talk about fate.

[00:09:54]  Andriy Tarasenko: Which is financed today from developers, then, in principle, this percentage is in the program. It has changed a bit since the beginning, but it remains at about 10 percent. It is important to note that since the beginning of the year, the number of accredited developers in the primary market has been increasing very actively. That's why the number of sales in the primary market, i.e. housing under construction, is growing. It is still growing today. If we are talking about the last few months, it is more than 20 percent. It may not sound like much, but we started from scratch. And this. A small way is a small step for us. But it is felt. And those developers who are already in the program. They feel it on their own. Almost four thousand loans were financed from developers, and developers received six billion hryvnias in sales through our program. The geography of the program is quite heterogeneous. It is clear that Kyiv, the Kyiv region and more western regions are leading the way. I will not dwell on this. It is important to add that we are developing and adding.

[00:11:16] New banks in the program. This year, we were joined by such banks as Credit Dnipro, Bis Bank.

[00:11:24]  Andriy Tarasenko: Recently started lending. Rada Bank ICB will be launched. And in this sense, it is important to say that we have one.

[00:11:34] The main requirement for banks to enter the program is readiness.

[00:11:38]  Andriy Tarasenko: To lend to developers and primary, and banks that are entering the program today. They come from the pool.

[00:11:47] Certain developers pre-accredited by the bank in order to.

[00:11:53]  Andriy Tarasenko: Show us, as operators.

[00:11:55] Programs, how they will close this issue. And in order to give offers to those customers who are applying for housing today.

[00:12:07]  Andriy Tarasenko: The number of applications has not decreased, there are only more applications. If we talk about.

[00:12:13] Pace, we are going with about one billion per month today.

[00:12:21]  Andriy Tarasenko: Lending under the program. This pace will continue in the coming months. For the next year, we are planning.

[00:12:30] We are preparing to increase the pace of funding.

[00:12:34]  Andriy Tarasenko: There are certain tools that we use for that, including attracting financing.

[00:12:41] On the domestic market. Today, the pace is about one.

[00:12:47]  Andriy Tarasenko: A billion per month is 100,200 loans. It is worth noting that we have an average check.

[00:12:56] This has been the case plus or minus exactly since the beginning of the year. This is a detailed statistic. Again.

[00:13:02]  Andriy Tarasenko: We have an update on our website every day, so please use it. 100 million hryvnias is our average loan check. Accordingly, the cost of housing is two, two and three million hryvnias. Of course, it differs from region to region, but in general, this is the situation. And we currently have eight regional programs in place. Kharkiv has recently joined these programs. Today, Kharkiv region offers additional compensation in the form of fixation for military personnel. It is very pleasing that such a region is now allocating resources for this assistance. We expect that the first loans will be disbursed this month, and banks will join the compensation program. In total, more than 100 loans. Already this year, they were issued under compensation programs that allow different categories of citizens to compensate the interest rate to zero or provide additional ones.

[00:14:07] Opportunities for down payment compensation. In terms of.

[00:14:14]  Andriy Tarasenko: The geography of developers, it somewhat touches the geography of loan issuance. As of today, we have 10 developers in the program. Thanks to our bank and partners, this is all happening. Our partner banks have picked up the pace per month. On average, about 20 new program developers are added. I think this is a pretty cool result. Today we have 10 developers and 100 houses. Here I would like the audience to find the name of their company. I think it would be nice. The entire list of developers accredited by us today could not fit into one slide. There are already two of them. I hope there will be 10 in a year. Once again, eSelya is an opportunity for you to take advantage of it or not. This is solely the decision of the developers. We are currently engaged in a fruitful dialog with regional developers. We see quite significant distortions in supply and demand in the regions. There are regions where developers today feel most comfortable in terms of sales and do not consider eHouse as an additional sales channel. At the same time, other developers in the same regions have a different view of this situation. Since the beginning of the year, we have been actively traveling to the regions and meeting with existing developers directly. That is, we have a specially trained manager who will be happy to meet with each of you, tell you about the status of the program, directly tell you about its prospects and development plans, help and advise you on which bank is better to choose for a particular object. Because banks have different requirements for accreditation. So in order not to waste time, it is more optimal to go through this procedure. It will be useful to get such a consultation in any case, if you cannot be reached or called. All our contacts are available on our website. We respond to emails, phone calls, and chats. Please, if you need a personalized consultation, we are ready to give it to you, and we will also be interested to get information from what is going on in your business.

[00:17:02] In business, in your region. What prospects do you see?

[00:17:05]  Andriy Tarasenko: And if we talk about the present, the changes that are in place today and that are planned, then literally a month ago, amendments to the resolution were adopted that make it possible today.

[00:17:20] Expanding opportunities for young people under the age of 12 to get a loan with a reduced advance. If it is standard.

[00:17:27]  Andriy Tarasenko: 100 for young people, which is important for us today.

[00:17:31] To get and give the opportunity to live comfortably in our country. The advance payment was reduced to 10 percent.

[00:17:40]  Andriy Tarasenko: We have combined the capabilities of the Housing and Recovery programs. That is, citizens who today have destroyed property and received housing certificates under the recovery program can use them to pay part of the down payment or most of the cost of an apartment at the expense of this certificate, and for the amount they lack, get a loan under the EU program.

[00:18:09] The opportunity to purchase residential buildings under construction has also been launched.

[00:18:15]  Andriy Tarasenko: There are some questions about the developers' readiness and ability to register property rights to private houses today. We are aware of this problem and are also dealing with it. We are interested in it. The decision has been made, but it will come into effect in late to mid-December. This is for the category of IDPs who have lost their payment today for one reason or another.

[00:18:44] The ability will include the ability of their first-degree relatives. We mean in the first place.

[00:18:53]  Andriy Tarasenko: Parents and children. If they pay enough, they can buy an apartment for their relatives.

[00:19:01] I mean, I'm a conditional. I have parents who moved from the occupied territory.

[00:19:07]  Andriy Tarasenko: I am also capable, I can do it.

[00:19:08] Take out a loan and buy an apartment for them, pay the loan for them. Or another story.

[00:19:14]  Andriy Tarasenko: Maybe it's the other way around when children moved there, lost their jobs today or didn't get fully established economically.

[00:19:25] And so their relatives will be able to support them. I hope this will help this category of citizens today.

[00:19:31]  Andriy Tarasenko: To get the opportunity to live in their housing. Clarifications were also made to the programs regarding the possibility of obtaining a loan if a citizen has previously received one.

[00:19:45] State aid for other programs related to housing, but.

[00:19:49]  Andriy Tarasenko: This housing was destroyed or occupied. That is, they will be able to get a loan again under the eOselya program. This is something that has already been adopted in our work. In addition, we are working to simplify the procedure Joining developers to the eOselya program. I will repeat, today we have 10 banks participating in the program, and each bank has its own requirements for the accreditation procedure, its own questionnaire, and a set of documents. We have done productive work. Thanks to our partner banks, we have agreed on a unified accreditation application format, and this application has already been approved and finalized. It will be implemented and put into action soon. Accordingly, new developers or current developers who want to expand the list of banks they are accredited with will be able to submit one application to any bank. The program participant and the bank will make a decision on accreditation based on this application.

Furthermore, we are working to make the accreditation process as comfortable as possible, similar to the process of submitting an application for our clients via Diia. There is an initiative to develop a “developer's cabinet” on a specific platform, through which the developer will be able to use modern digital solutions to pull data about their company and projects from open registries, supplement some data, and submit the application in digital format to one or multiple banks they want to consider.

This project is in development, and while it's not close to completion, I cannot specify the timeline for its implementation yet. However, I wanted to emphasize that we are also striving to simplify developers’ participation in the program. We're working on this.

The main thing that many expected was that recent changes would shift the focus toward primary market lending. These changes have been somewhat postponed, and the issue is currently under consideration by the government. We might see a decision either this week or next. If approved, we believe it will significantly increase, as you, Oleksandr, mentioned, the volume of lending for housing both under construction and newly built housing. This is important to highlight.

If these changes are approved this week, then within a month, when they take effect, all the demand and capital we currently allocate for financing will significantly shift. And you need to be ready for this. If you’re not yet in the program, you should consider accreditation today.

Vasyl, if you are already in the program, you should receive a response from your sales department today.

[00:23:14]  Andriy Tarasenko: Because demand will come your way. We expect that the current proportion will reverse in the near future.

[00:23:21]  Andriy Tarasenko: Because demand will come your way. We hope that the proportion we’ve seen will reverse in the near future. Overall, our dream, our desire, and our task is to make eOselya a product that maximally stimulates construction and the economy through the lending for developer-built housing. That’s the main point. If possible, Oleksandr, if you have any prepared questions, I’m ready to answer them.

[00:23:56]  Thank you, everyone. We will...

[00:23:58] We will have a discussion, but I have two immediate questions. To put it bluntly, we are somewhat dissatisfied with the pace of the primary market. Although the program increases the percentage of adjustments in the primary market, it still predominantly remains focused on investments. I understand that this may be more accessible for people, but it’s not an investment in the economy. The money from the loans we’re providing doesn’t encourage developers to invest, particularly in housing. That’s the first point.

Second, regarding the primary categories: the primary market includes housing up to three years old. In my opinion, three-year-old housing is the most expensive, especially if it’s newly commissioned in Ukraine. Have you considered revising this criterion in any way?

Okay, and the third point is about the coefficients. The Ministry determines coefficients for certain regions. I noticed that yours was 10 to 2. How do you influence these coefficients, or do you provide recommendations? Because the cost of housing is rising, the coefficient used to be 2.5 to 2. In fact, the upper limit for affordable housing has been significantly lowered, which is quite substantial in our current reality. If we take major cities, for example. How do you influence this? Do you provide recommendations, and will the coefficient be revised, or will the policy change altogether? These are just the first questions, but...

[00:25:33]  We'll discuss this after these speakers. Yes, thank you.

[00:25:40]  Andriy Tarasenko: Regarding the first point and...

[00:25:42] ...the share of the primary market. As I mentioned, we are waiting for changes that should significantly impact the situation. But it's also important to understand that we are all working together for the customer. I believe that all the developers present understand that the needs and preferences of clients, and their housing requirements, are changing today. We are in substantial...

[00:26:12] ...dialogue with individual developers, with the Confederation...

[00:26:17]  Andriy Tarasenko: ...and with other developer associations, as well as with realtors. We clearly see feedback from the market, showing that the customer, especially the social customer, for whom our program is designed, is looking at a three- to four-month horizon. Three to four months is the maximum time the buyer is willing to wait to move into a property because they likely cannot afford to pay both the loan and rent simultaneously.

[00:26:48] ...And in many cases, they also need to complete renovations.

[00:26:52]  Andriy Tarasenko: So, the result is, once again, a reflection of the current demand from customers and the offers provided by developers. I know that many developers have significantly changed their approaches.

[00:27:10] They are moving away from large, long-term projects and are focusing on smaller developments with low-rise buildings. There are also offerings that include modern technologies and finished renovations. I’m hearing clearly from them that...

[00:27:28]  Andriy Tarasenko: ...there is high demand for this type of housing, both through our eOselya program and generally from investors and regular buyers, even those paying in cash. So, this factor should also be taken into account.

[00:27:48] The second point relates to the coefficients. The coefficients...

[00:27:52]  Andriy Tarasenko: ...are reviewed quarterly by the Ministry of Infrastructure, and we monitor them closely while maintaining regular dialogue with developers. Once again, I encourage you to establish contact with us. We regularly discuss the relevance of these coefficients and engage in constructive debates and dialogue. As of today, there is an understanding that these coefficients meet market demands.

The coefficients are updated quarterly, and we are ready to proceed with the update of the new coefficients, as well as...

[00:28:34] ...receive feedback from the market and work through it. We are absolutely...

[00:28:39]  Andriy Tarasenko: ...open to this, and there are opportunities to influence the order of these coefficients. However, clear justification is needed for why and how we should do this.

[00:28:56]  Oleksandr Chervak: Alright, let’s move on. The alert interrupted us a bit, and I didn’t manage to introduce the other participants in today’s panel. I apologize, so I’ll do that now. Our next speaker is Mykola Marchuk, Head of State Housing.

[00:29:07] Let’s also welcome Olena Dmytrieva, First Deputy Chair of the Board of Globus Bank, Anna Anisimova, Head of the Investment and Analytical Department of Integral Bud.

[00:29:22]  Oleksandr Chervak: Dmytro Struk, representative of Creator Bud, and we also have Olha Sydorchuk, who represented and is the Head of the Committee on Legislative and Regulatory Policy.

[00:29:36] Joining us as well is Olena Vona, Director of Development for the UN.

[00:29:41]  Oleksandr Chervak: Among the invited participants, we also have representatives from many developers, including...

[00:29:48] ...Borys Rabotnyk, Head of the Housing Construction Department of the Kyiv City State Administration.

[00:29:57]  Oleksandr Chervak: Let’s move on. We have a program for internally displaced persons (IDPs) from State Housing, which is funded and partly critiqued by the German Bank. Now, regarding this program, its dynamics, opportunities, and criteria—I'll pass the floor to you.

[00:30:21] Chairman of the Board of Non-State Housing Mykola Marchuk. Thank you very much. Alexander. I would like to welcome everyone in this room. I would also like to start by thanking the organizers for the opportunity to present the work of Youth Housing and report on the status of the Housing for IDPs program. Also, I would like to take this opportunity to congratulate our guests today.

[00:30:48]  Mykola Marchuk: The defenders of the state.

[00:30:50] Holiday, to thank them for their courage, for their bravery and for their steadfastness. I represent the State Fund for Youth Housing. Our financial organization has been operating in the financial services market for more than 10 years. We have been involved in state and municipal programs aimed at providing housing for various categories of citizens.

[00:31:17]  Mykola Marchuk: And most of our programs are socially oriented. Today we work with the category of youth.

[00:31:25] Today we are working with the category of internally displaced persons, military personnel, as well as researchers and teachers. Since 1991, we have been focusing more and more on the category of internally displaced persons. Our programs have specific conditions and are adapted to the needs of IDPs, and accordingly, they can benefit from them. Today, Youth Housing implements eight state programs and more than 10 municipal programs. These are programs that include various mechanisms for both mortgage lending and non-repayable financial assistance. We also work with programs to reduce the cost of loans from commercial banks. Our institution is represented in all regions of Ukraine. We have 10 regional offices that operate in absolutely all regions. Each of our programs that we have been involved in and are implementing has open registers of candidates. And we have a huge demand because there are thousands of families of citizens.

[00:32:34]  Mykola Marchuk: They are waiting for their opportunity.

[00:32:35] Take advantage of these programs. Over the period of our financial institution's operation, more than forty-two and a half thousand families have been provided with housing, having used one or another mechanism. Also, today we have more than 10 thousand loans under servicing, which we actually manage and work on. But today I would like to dwell in more detail on our international cooperation with the German government and the bank to rebuild the checkpoints. I would like to inform you in more detail about the program we are jointly implementing. In 2022, thanks to the cooperation of the governments of Germany and Ukraine, a financial cooperation agreement was signed.

[00:33:22]  Mykola Marchuk: And that was.

[00:33:22] The basis that was laid at the beginning of the provision of financial resources. And we are talking about grant funds specifically to provide housing for internally displaced persons. Later on, several more agreements were signed and a resolution of the Cabinet of Ministers was adopted in 2019, which declared the procedure for using these funds and clearly outlined the procedure for providing preferential mortgage lending. In this program, Youth of Housing is the executor, and it is also implemented with the support of the main administrator. This is the Ministry of Reintegration. We have one consultant implementing this program. The company is 112 International, which also provides support, supervision and control over this project. Also, in this project, we have formed a steering committee that analyzes the quality of implementation on a quarterly basis and also makes decisions.

[00:34:23]  Mykola Marchuk: Or other decisions that.

[00:34:26] Accompanying the issuance of loans, the adoption of relevant operational decisions that serve to change or other issues that are already related to its practical implementation. If we talk about the stages of implementation, in May 2012 we actually started the lending process. The first stage involved the allocation of €10.5 million in grant funds, which we used in 2009 and disbursed as loans to families. During this period, we provided 200 families with their own housing. This program also included the use of a revolutionary fund. All those funds that had been previously issued. I'm talking now about the funds from the return. They go to re-lending of the following families registered on the list are waiting for their participation. Following the completion of the first stage, we underwent an international audit and, accordingly, reported on this stage of implementation. Based on the results of the announced auditors' report, the program was recognized as having been implemented at a high level and without any violations. This allowed us to continue our cooperation. And at the end of the 20th year, we signed an additional agreement to the grant. And the bank provided funding of EUR 20 million to continue such lending. We are now continuing the practical implementation of this program. These funds will give us the opportunity to get close.

[00:36:11]  Mykola Marchuk: 100 families to provide housing in 2020. And now it is just going on.

[00:36:17] The stage of selecting the winners from the register list and actually providing them with the opportunity that these mortgages provide. We have a great demand for this program, because the register list that we have.

[00:36:31]  Mykola Marchuk: Unite, it has more than 20 thousand families of candidates today. These are the families who have registered.

[00:36:38] And they are waiting for their opportunity. Details. Next, I would like to elaborate on who exactly.

[00:36:46]  Mykola Marchuk: Can use this one.

[00:36:47] This program and to elaborate on its conditions. This program is designed for families of internally displaced persons who do not own housing. And here we are talking only about the territory controlled by Ukraine. All the housing that IDPs have in the non-government controlled area still gives them the opportunity to participate in this program. We also check the families' ability to pay.

[00:37:16]  Mykola Marchuk: Official income, mandatory.

[00:37:17] A requirement of this program. And we also get access to check the credit history of families. And in this case, we lend to families who have a good credit history. The family may include a husband, wife and, accordingly, their children, as well as the parents of the wife or husband, if the family has persons under its care or custody. This family may have the following.

[00:37:44]  Mykola Marchuk: Family members can also.

[00:37:46] Be included in the family and, accordingly, they will also be calculated. A prerequisite for this one.

[00:37:54]  Mykola Marchuk: Families that participate, it is mandatory.

[00:37:57] Living together. If we talk about the terms of this program, it is currently the most attractive mortgage lending program for internally displaced persons. No other financial institution in Ukraine offers similar conditions today. And this is a minimum down payment of 100. This is an interest rate fixed at three percent. And it is the loan term, which is up to 10 years at most. The object of lending can be ready-made housing from both legal entities and developers, and, accordingly, housing that internally displaced persons can choose on the secondary market. The requirements for the object are not older than 10 years from the date of commissioning, if in this case.

[00:38:46]  Mykola Marchuk: The object has been reconstructed and no more than 10 years since the reconstruction.

[00:38:52] The loan amount is calculated based on two indicators.

[00:38:58]  Mykola Marchuk: The maximum cost and, accordingly, the normative area, which is clearly stipulated by the terms of lending and is for.

[00:39:05] Single families 10 and a half, for single citizens and families of two people it is 100 square meters. For families with three people, four. And then we add one square meter for each family member as well. Also, I'm sorry, it will be better to hear me now. Also, this program has a marginal cost and it is calculated using the indirect formula multiplied by the established coefficient. If we are talking about the city of Kyiv or large cities with a population of more than one million, the coefficient is 100 in Kyiv. Today, this is 20 and a half thousand hryvnias, the maximum value for which we can make a calculation. I have already mentioned that the winners are selected from among the registered candidates using our register list. And each family is a candidate who accordingly learned about our program and sees the opportunity to participate in it.

[00:40:10]  Mykola Marchuk: They can register in this list using the opportunity provided by the Diia portal today. There is a corresponding tab in Diia where you can fill out an application and complete the registration process.

[00:40:25] But we have modernized this process a little bit. We have made appropriate changes to the resolution of the Cabinet of Ministers.

[00:40:32]  Mykola Marchuk: 2012, and today.

[00:40:35] Already the families who are planning to register for participation in this program, they will be thoroughly checked for compliance with the program requirements through the Diia portal using open registers. In this way, we want to form a register list with more potential families of candidates for this loan. The Diia portal is currently undergoing a corresponding modernization. It will take them about two months. And on the first of 2019, registration through the Diia portal will resume. In the meantime.

[00:41:08]  Mykola Marchuk: [00:41:00] Anyone who wants to participate.

[00:41:10] Can register through our regional offices, applying according to the conditions of housing. Also. Analyzing our program, who was interested and perhaps you have heard about the selection of candidates for participation, given the limited resources and so on. It is done by random selection. There are many questions about how it goes. Question.

[00:41:35]  Mykola Marchuk: To say that it is absolutely.

[00:41:36] Open selection. It takes place with the help of a random number generator of numbers, which we apply using the program Randomly on a certain date when we plan to do such a selection.

[00:41:51]  Mykola Marchuk: The registration is stopped.

[00:41:52] The number of candidates is clearly recorded in the registered list. The program indicates the number of winners we plan to select, and without the use of the human factor. We make this selection. It's all broadcast. The entire procedure is broadcast live on YouTube. On ours.

[00:42:11]  Mykola Marchuk: The pages are also Random.

[00:42:13] Selections. We have representatives of the main manager of the implementation of this consultant. We immediately announce the results when we determine the winners. Within one day, each winner has a call from our regional consultants, and.

[00:42:28]  Mykola Marchuk: He also has this information.

[00:42:30] And gets the first consultation about this program. Ideally, each winner can actually. Within 10 days, prepare the appropriate package of documents prescribed by the program and choose the housing that they will purchase in the future. Then the next step is to apply to the regional offices with such documents, and then they are processed.

[00:42:55]  Mykola Marchuk: Analysis and at.

[00:42:57] After a positive decision, a decision is made on lending. Families deposit a part of their own contribution into their account and credit funds are also credited there for them. Subsequently, the accumulated amount of 100 percent of the cost of the apartment is transferred to the seller or developer when the purchase agreement is concluded. In this case, this property, which is acquired in the family, is also mortgaged property, i.e. it is transferred to a financial institution to secure the terms of the loan agreement.

[00:43:28]  Mykola Marchuk: But the family from the first one.

[00:43:29] On the day of purchase, they are the owner of this housing. Going forward, we are continuing to implement this project. We have high hopes that we will be able to scale up the success it has had. We are also constantly looking for other sources of funding and continue to work with our international partners. Today we have certain achievements in our work with the Council of Europe Development Bank and we hope that in '91 we will be able to.

[00:44:04]  Mykola Marchuk: To continue this project at the expense of the bank as well. Also housing for young people.

[00:44:10] Open to cooperation, so we invite you to joint implementation.

[00:44:15]  Mykola Marchuk: Our goal. Thank you for your attention.

[00:44:19]  Oleksnadr Chervak: Thank you. Thank you, Nikolai.

[00:44:22] A couple of questions at once. Do you have a home ready for renovation?

[00:44:28]  Oleksnadr Chervak: Yes, that's the question.

[00:44:32] It's already a potential, actually a buyer is a person who is applying.

[00:44:38]  Oleksnadr Chervak: She's looking for a place to live and applies to you. So you don't work with papers.

[00:44:42] And with banks. You're in direct contact. You are given recommendations and suggestions.

[00:44:47]  Oleksnadr Chervak: You either accept them or not. The first and second questions are a limited amount or if there is housing above the value of your coefficients? Or maybe overzealousness? For example, a potential client an internally displaced person to pay extra on their own? As an example. And thirdly, in which regions do you have the most activity on yours.

[00:45:12] Programs and with which developers? Perhaps you know the most about assignment. Thank you, Oleksandr, for your question. I'll start with the first one.

[00:45:24]  Mykola Marchuk: Yes, indeed, our program.

[00:45:26] It provides for the purchase of ready-made housing. This is housing that has been put into operation. And the choice of the object itself.

[00:00:00] Mykola Marchuk: We are also in the secondary market. It can be optimal for them both in terms of cost and convenience.

[00:00:10] And as for the renovation, it can be apartments without renovation or with renovation.

[00:00:15] Mykola Marchuk: It's up to each family to decide for themselves.

[00:00:17] What are their respective priorities. This requirement is set by our international partners and, given the specifics of the category of citizens we are working with, these are internally displaced persons. Here we are talking about the fact that they do not have the opportunity to wait for the completion of the facility. Today we need to solve the housing issue, so these are ready-made apartments. As for exceeding the maximum cost set in our programs, it is true that if a family

[00:00:54] Mykola Marchuk: She's looking for a place to live.

[00:00:57] Which will be more expensive than the set threshold value, or, for example, if she chooses.

[00:01:02] Mykola Marchuk: For themselves housing that.

[00:01:02] Will exceed the calculated standard area, they can, if they have such an opportunity, pay extra for the difference in cost and, accordingly, for the difference in square meters, which in this case may be. If we are talking about the greatest interest of the program participants. Today, the majority of participants choose the capital, the city of Kyiv, and the Kyiv region. But the next ones are the city of Dnipro, the city of Odesa, the city of Poltava, the city of Lviv, and the city of Kharkiv. Thank you very much. Again, we will move on. And then we will take questions from the participants. We'll come back to this at our place.

[00:01:50] Oleksnadr Chervak: We will now continue with what we wanted to start with analytics. Elena UNANYAN.

[00:01:59] Director of Development of LUN, prepared today an analysis on the state of the. Real estate market of the primary real estate market today.

[00:02:09] Oleksnadr Chervak: And the start of construction process, construction dynamics, sales dynamics, forecasts, regions of leaders, features. Ms. Kovalenko, let's start with you. Thank you for joining us. And so it was then. Now let's put numbers to our panel.

Housing Real Estate Analytics. Olena Unanyan, LUN Development Director.

[00:02:31] Olena Unanyan: Good afternoon, everyone! Yes, we had to start with that. I'm very sorry, but I hope I've got a lot of interesting things for you today.

[00:02:38] We are with you in numbers.

[00:00:00]  Olena Unanyan: Real estate market prices and statistics.

[00:00:04] The market is an integral part of the impact on the primary, and now especially. So we'll take a look.

[00:00:10]  Olena Unanyan: What is happening with prices both there and there. And, of course, we will talk about such an important aspect as sales in the primary market, because nothing affects the primary market like sales. To begin with, we will start with the primary market and start with the launch of new residential complexes. This is an aspect that makes us understand how much developers are now ready not only to resume work on their current projects, but also how much they are ready to launch new projects and support the market. And you don't have a good view of the figure. But I understand that you will get the presentation, you will have it. This is the quarterly statistics of residential housing starts in Ukraine, starting from the beginning of the full-scale invasion and now just up to the third quarter of 2000. Now let's look at the following pattern, which is observed 21 years after Covid. A very active year in which a lot seemed to be sold. They were launched. On average, 100 residential complexes were launched per quarter. Since the beginning of the full-scale, we take the second quarter of 2019 and the first quarter of 2019, an average of 11 residential complexes were launched per quarter. That is, this is a drop of almost 10 percent compared to 2019. And what have we seen since the second quarter of 2019? Let's look back at the second quarter of 2021. It was spring. We all felt the first such tangible recovery in the market, pent-up demand began to grow, and more sales began to be converted. That is, we really felt the first tangible recovery. Therefore, from about the second quarter of 2019 and now we see that an average of 10 residential complexes are launched per quarter, which is 20 percent more than in '90.

[00:02:02]  Olena Unanyan: That's why we see positive dynamics. There is also a noticeable slump in the last quarter of this year. That is, fewer launches were made in the summer, but in general, it is kept at the level of plus or minus 10 residential complexes per quarter now and we will see. Now, year-on-year, and this is the start and sales just now not by quarters, but year-on-year. In order to assess the dynamics, so that we could evaluate this year in comparison with the previous ones, we processed data, we will not count them

according to the forecast. That is, we do not predict how many will be launched by the end of the year. We analyzed the data up to the end of the year only to be able to estimate the year-on-year and year-over-year rates. In 2019, starts in Ukraine dropped by 100 percent, and in 2019 they grew by 90 percent. And now we see this growth rate continuing and another 20 percent. So in general, we are seeing positive dynamics and we see that it is half of 2000 now. And this is in Ukraine. As of now, since the beginning of the full-scale invasion, sales have started for the first time in almost 100 residential complexes, to be more precise, 100 residential complexes. And these are the top 10 regions in terms of new project launches, with Lviv being the undisputed leader. Since the beginning of the full-scale invasion, Lviv and the region have launched twice as many residential complexes as in Kyiv and the region, which ranks second.

[00:03:25]  Olena Unanyan: And then Zakarpattia region, Ivano-Frankivsk region, and Ternopil region. That is, in general, we see four out of five regions. These are the western regions of Ukraine, which tells us that this is also an indicator of how development has responded to the shift in demand to the west of Ukraine. Speaking of launches, let's take a look at how many residential complexes have completed sales. And there are 100,000 of them. Either they have completely completed their sales, or they have completed sales in all their houses in which they were hardened. Perhaps new channels are planned there. They are not being launched now. That is, these are residential complexes where something was sold, but is no longer for sale. And this is actually by region, by completed sales. Lviv is also in first place here, but without such a gap to Kyiv, which is in second place. Ivano-Frankivsk is third. Then Odesa and Khmelnytsky regions. Now let's take a look at what happened with the start of sales in such a flagship market. Kyiv and the region - this is the annual dynamics immediately shown here in rhyming data. This is the annual dynamics of sales starts in Kyiv and the region. What can be seen here? We see that in 2021, sales launches dropped by 10 percent, almost when the average in Ukraine is 10. In 10, we see one and a half times more launches than in 20. Now the pace is still 20 percent higher, but it is still a third of 2000. Therefore, the subsidence in Kyiv and the region is much more noticeable than the average for Ukraine. Where it is less noticeable is in Lviv.

[00:05:05]  Olena Unanyan: Lviv did not have such a subsidence, in 2010 it was 10 percent, as opposed to 10 percent in the whole of Ukraine and 10 percent in Kyiv in 2010, it dropped by one and a half times more than in 10, and 21 caught up in terms of

the start of sales. After Covid, it has been active for 21 years, and now the 20th year will confidently survive the 20th year by all indicators, because we see Lviv gaining momentum. And exactly the same picture is observed in Ivano-Frankivsk. There is a gradual, rapid, stable growth with the start of sales. That's why there are currently 1,500 residential complexes for sale in Ukraine, including one in four residential complexes that were launched during the full-scale invasion. Yes, the market has been slightly updated over the past two and a half years. It's about launching sales. Launching sales is one thing. It's another thing to build projects. That's why we're going to talk about construction. Construction is a more complicated story. As of now, 10 residential complexes out of those under construction in February 2021 have resumed construction. Some have already been built. By this time, 100 still have completely stopped frozen construction. But the resumption of construction is a very stretching topic. Someone is restoring it to 100 percent of its pre-war capacity. Someone is restoring half of it, someone is restoring 90 percent, depending on how they manage. That's why it's a long story. So, in order to estimate it somehow.

[00:06:45] The pace of construction, we calculated.

[00:06:49]  Olena Unanyan: Delivery date postponements from developers. What did we do for this? We took over all the construction phases. The first announced deadline for completion was from the beginning of the full-scale invasion, that is, from the second quarter of 2019 to the end of 2019. And we looked at this data, updated as of spring 2019. We will update them at the end of the quarter. But the picture will still allow us to see and understand what is happening in terms of postponements. As of spring 2019, we have calculated the postponements. There were 100,000 such queues, of which 10,000 have already been delivered and another 100 have not been delivered. Let's take a closer look. 90 percent of the queues that have been delivered means 90 percent. And 90 is not out of 90 percent. This is out of a total of 100. That is, 90 percent of all the queues were completed on time. They said for the first time that they had planned for the third quarter of '20 and handed over in this quarter. And another eight percent passed three to six months later. Another five percent surrendered six months to a year later. But two percent also gave up a year and two years later. That is, in general, one in four people who planned to give up have already given up, and almost three-quarters of all the queues have not been completed. Let's also look at the postponements. It is important to understand that postponements are also a bit of a shaky story, because the developer can postpone them several times, so this is just a fixation As of spring 2019, delays in project completions continue. It’s entirely possible that these delays will persist. Nine percent of construction phases had their deadlines pushed by six months, another 20% were delayed by six months to a year, and 20% by one to two years. Over a third of projects were delayed by one to two years, and 5% were delayed by more than two years. For 90% of phases, the completion date is still unknown, meaning developers cannot currently specify or assess the handover date.

[00:09:03]  Olena Unanyan: How can we leave the completion date unknown? That’s the current picture. Of course, the final stage of any construction is its commissioning, so let’s take a look at those numbers. In September, the State Statistics Service updated the data for square meters commissioned in the first half of 2021. At that time, 4.5 million square meters were commissioned in the first half of the year. This includes both single-family homes, like houses and cottages, and multi-family housing like apartment complexes. In total, that’s 4.5 million square meters, which is 20% more than in the first half of 2019, 10% more than in the first half of 2019, and, interestingly, 5% less than in the first half of 2010. When I showed this slide to my colleagues, they asked if we can say we’re catching up to 2009. Not yet, because as the chart shows, 900,000 square meters were commissioned in the first half of 2010, while 60% of the year's total was commissioned in the second half. So, the first half of the year was slower than the second half. We’ll have to wait for the final year-end data from the State Statistics Service to compare year-over-year results and determine whether we’ve caught up to 2009.

These are the total square meters. Unfortunately, the State Statistics Service doesn’t provide a clear breakdown to compare just the first half of the year for multi-family buildings, such as apartment complexes. However, I’ve made an estimate—though I didn’t create a slide for it—that in new buildings, the total number of square meters also increased compared to the previous year. But while the overall square meters grew by 90%, in new builds, the increase was closer to 90%. Nevertheless, there was still a growth in the number of commissioned square meters in 2020 compared to 2019.

[00:11:02] Now, let's move on to pricing. Let's take a look at the top 10 regions...

[00:11:09]  Olena Unanyan: ...where the average minimum price per square meter in dollars increased the most. In fifth place is Cherkasy for the first time, Cherkasy For the first time, Cherkasy has entered the top 10 regions with the highest price growth. The price in Cherkasy has increased by $100 over the past year. In second place... sorry, in fourth place is Lviv, with a price increase of 10%. In third place is Rivne, also with a 10% price increase, second is Ivano-Frankivsk, and in first place is Uzhhorod, where prices have increased by 20%. Lviv has held the top spot for nearly a year for the highest price per square meter across all of Ukraine. The average minimum price per square meter in new builds here is nearly $1,000 per square meter. But we see Uzhhorod steadily gaining ground. Since the full-scale invasion began, the number of projects in Uzhhorod has been growing, and with it, the price has been rising steadily and consistently. Now, it has reached $1,100 per square meter. To understand Uzhhorod’s rapid growth, let’s compare it with Kyiv. The average minimum price per square meter in Kyiv is currently $1,000, meaning Uzhhorod has almost caught up to Kyiv in terms of the average minimum price per square meter.

Now, let’s look at what has happened with prices in the capital over the past year. Even without my commentary, it's clear that prices have plateaued. Over six months, prices have decreased by 2%, and over the past year, they’ve increased by just 1.5%. These are minor fluctuations, so we can say that prices in the capital have stabilized at a plateau.

In contrast, Lviv, like Uzhhorod, is showing steady, consistent growth in price per square meter. Over six months, prices here have risen by 6%.

[00:12:59]  Olena Unanyan: Over the year, prices have increased by 20%. The third region we’re monitoring closely, due to the large number of projects there, is Odesa. Prices in Odesa have also remained stable, despite the significant drop in sales and the challenging situation in the city. Prices have remained at a plateau, with a 1% decrease over the year. That’s the primary market. Now, let’s take a look at the secondary market, which, as we’ve already discussed, is currently impacting the primary market.

This graph is a bit more complex, so let me explain it first. The upper orange line represents the average price of a one-bedroom apartment in dollars as listed on our portal, Realtor, from LUN. The lower purple line shows the average price of one-bedroom apartments in dollars, but only for those apartments marked as sold by realtors or owners. This allows us to compare the average price of listings with the average price of apartments that were actually sold. Since the purple line is below the orange one, it’s clear that apartments are selling for less than the listed price the average selling price is 10% lower than the prices listed in advertisements. This doesn’t mean that all owners are reducing the price by 10%, but rather that if there are two apartments listed for $10,000 and $11,000, the one for $10,000 is more likely to sell. So, let's take a look at how prices in the secondary market have changed. Over the past six months, the price listed in advertisements has decreased by 7%.

[00:14:46]  Olena Unanyan: The price of apartments marked as sold has decreased by 20% over the past six months. If we look year-over-year, the price in advertisements has remained practically unchanged, while the price of apartments marked as sold has decreased by 20%. So, overall, we see that over the past year and the past six months, prices in the secondary market have decreased by around 20%. We’ve also developed a new statistical product. Some of you may be familiar with it. It collects daily statistics across all regions, which you can view at any time. Here’s one of the new graphs I’ll show you today. It categorizes all apartments based on price and quantity, allowing us to see in which price range the majority of apartments are listed. Let's look at this for one-bedroom apartments: 10% of all one-bedroom apartments in the secondary market fall within the $10,000 to $70,000 range. If we look at the detailed distribution, it looks something like this. We see that 10% of apartments are in the $10,000 to $20,000 range, another 10% are between $20,000 and $30,000, and another 10% are between $30,000 and $100,000. This is the distribution, and it’s a very interesting graph. We’ve also included it in our product. We calculated how quickly apartments listed in the secondary market are being sold. That is, from the moment the apartment is listed to the moment it is marked as sold. This graph reflects the speed...

[00:16:32] ...at which apartments are sold. If the graph rises, it means apartments are selling more slowly.

[00:16:37]  Olena Unanyan: If the graph falls, apartments are selling faster. For example, from August 2009 to January 2010, apartments sold more slowly. Then, from January to March, we see apartments started to sell faster, and now we see a gradual increase. If we look year-over-year, apartments in the secondary market are currently selling 1.5 times slower than...

[00:17:04] ...they were a year ago.

[00:17:07]  Olena Unanyan: As promised, I’ll now focus more on the primary market. Let’s take a look at primary market sales. As you know, there’s no official data or statistics on primary market sales, so we’ve been gathering this data over the past seven years through our own research. This is a closed study that we conduct with developers, where we ask them how many apartments they’ve sold. Based on this data, we estimate the overall sales figures for the entire market. I’ll now show you the trend. Our most recent negative study was conducted in the spring of this year, so we have data up to the first quarter of 2019. However, we plan to conduct the next study this October, which will show what sales have been like over the past six months. Let’s look at the current data for the first quarter of 2021.

From the beginning of the full-scale invasion through the third quarter of 2020, despite the market’s turbulence and uncertainty, if we look quarter-over-quarter, sales gradually increased. The peak in sales recovery occurred in the third quarter of 2021, when sales rebounded to 20% of 2021 levels. As of the first quarter of 2021, sales have decreased by 20% compared to the peak in the third quarter of 2021.

[00:18:33]  Olena Unanyan: In other words, from the third quarter onward, the market felt a significant drop in sales, with a 10% decline being particularly noticeable across the board. Now, let’s look at a similar trend, but specifically for Kyiv and Lviv. In Kyiv, sales recovered the most in the third quarter and reached 90% in the fourth quarter, but then dropped by 10% in the first quarter, which is a 20% decline from 2019 levels. In Lviv, the picture is different. Sales here recovered to about half of what they were. To remind you, after the active period of 2021 following COVID, Lviv experienced a 90% decline in sales by the first quarter of 2020. Overall, there was a noticeable drop in sales across all regions. But this is just a question of first quarter of 2010. It’s interesting to understand what has been happening over the past six months. While we won’t have exact figures, we can still take a general look at the situation. To get a sense of whether sales are growing or falling in the market, we conduct monthly surveys in our closed Telegram channel.

[00:19:45] In this channel for developers, we ask them: how many apartments did you sell?

[00:19:50]  Olena Unanyan: The results of this survey don’t allow us to evaluate how many apartments were sold in specific regions, but they do give us insight into the trends—whether sales are increasing, decreasing, or rapidly growing or falling. This is the trend, gathered monthly over the past year, based on the surveys we conducted in our team. We can see that, starting from the third quarter of 2019, sales steadily declined through January 2019. In February, March, and April, we saw a slight improvement, but by May, sales dropped back to levels seen in January, which is traditionally a slow month for sales.

However, the latest survey, which reflects sales for August, shows that sales have noticeably increased. We’ve heard this from many developers—they are feeling the recovery of deferred demand that had been building over the last six months. So, we now see positive dynamics, and we hope that this trend will continue throughout the fall. We will keep monitoring it, and I will make sure to keep you updated. That’s all from me. Glory to Ukraine!

[00:21:19]  Oleksandr Chervak: Glory to the heroes! Thank you, Ms. Olena! Colleagues...

[00:21:23] Before we move on to the next speaker, I will have to...

[00:19:45] In our closed Telegram channel for developers, we conduct surveys where we ask, "How many apartments have you sold?"

[00:19:50]  Olena Unanyan: The results of this survey don’t provide data on how many apartments were sold or in which regions, but they allow us to assess the trend—whether sales are rising, falling, or sharply increasing or decreasing. So, this is the monthly data collected over the past year based on the surveys we’ve conducted within our team. We can see that, starting from the third quarter of 2019, sales steadily declined, falling through January 2019, then into February, March, and April. We noticed a slight improvement, but by May, sales had dropped to nearly the same level as in January. January is usually a low month for sales throughout the year. However, the most recent survey, which showed sales for August, provided insight into what sales were like for that month. It’s clear that sales increased significantly, and we’ve heard this from many developers. They felt the recovery of deferred demand they had been dealing with for the past six months. So, we now see a positive trend. We hope, and really hope, that it continues throughout the fall. We’ll be monitoring this closely and will keep you informed.

[00:21:19]  Oleksandr Chervak: Glory to the heroes! Thank you, Olena! Colleagues...

[00:21:23] Before we move on to the next speaker, I’ll need to...

[00:00:00]  Oleksandr Chervak: First, Globus Bank management. Ms. Olena, the floor is yours. Olena Dmytriieva, First Deputy Chairman of the Board, Globus Bank.

The Future of Commercial Mortgages in Ukraine
Olena Dmytriieva, First Deputy Chairman of the Board, Globus Bank

[00:00:13] Well, I’ll start right away with a graph to make it clear to everyone what we’re discussing.

[00:00:18]  Olena Dmytriieva: What we are talking about now.

[00:00:20] The level of commercial mortgages is actually...

[00:00:25]  Olena Dmytriieva: Currently, it does not exceed 20% of the total number of mortgage loans. You can see the graph of what’s happening. The blue color represents the total number of mortgage loans issued, according to data from the National Bank, and below are the mortgage loans issued under state programs. Before the war, we had an active program called "Affordable Mortgage," which covered 90% of loans. On October 1, 2019, the eOselya program was launched and has been actively running since. These data are combined. Initially, it was the 200 Affordable Mortgage program, and then eOselya, and now eOselya accounts for about 90% of the total number of loans. Therefore, commercial mortgages currently account for about 10-20 loans per month.

[00:01:21] Unfortunately, the reasons for this are numerous, with the main one being the war.

[00:01:32]  Olena Dmytriieva: As a result, people's risk appetite has decreased, and not everyone is willing to take on mortgage loans. If they do, they prefer the lower interest rates offered by state programs. This is the first and main reason. The second reason is the wide accessibility of eOselya to every citizen, which is a positive aspect, indicating that the segment was well-selected by our colleagues. As a result, eOselya now dominates the market. Currently, around a thousand mortgage loans are being issued per month. That's quite a lot. I believe that for a time of war, it's an excellent result. Before the war, if you look, the maximum number of loans issued in a month was around 1,000 to 1,100. So, we've almost reached that level now.

[00:02:33] But before the war, the level of mortgage loans issued through state programs did not exceed 10%.

[00:02:40]  Olena Dmytriieva: Now, however...

[00:02:42] ...it's almost 100%. When it comes to the primary market, though...

[00:02:48]  Olena Dmytriieva: ...the situation is different.

[00:02:51] The number of mortgage loans issued on the primary market is significantly...

[00:02:55]  Olena Dmytriieva: ...lower than before the war. To be honest, even before the war, few primary market properties were purchased with mortgages, and that's still the case now. The maximum number of mortgage loans being issued for the primary market is around 20 per month. You understand, if we have 10 developers accredited, that's just one loan per developer per month. Again, regarding the influence of state programs, if before the war it was around 10-20%, now it's 100%. And whereas we used to offer developers two programs—a commercial mortgage program and eOselya—now there's practically no alternative. Citizens immediately ask for eOselya, and no one is considering commercial programs. If the secondary market is still somewhat active, the primary market is entirely...

[00:03:56] ...dominated by eOselya.

[00:04:03]  Olena Dmytriieva: The effective interest rate, as a result of the state program's monopoly, has essentially reached European mortgage levels. Before the war, the effective rate was around 10%, and now it's still 10%. But you understand, the current effective market rate is around 10%. Thanks to the state program, for citizens, it's effectively 100%.

[00:04:32] Now, let’s take a look at.

[00:04:35]  Olena Dmytriieva: Mortgage rates in different countries. This is what I mentioned earlier. You can see that, for example, in Latvia, it’s 10%, and in Ukraine, it’s also 10%. In Poland, it's 10%, and interestingly, in Turkey, it's also 10%. This seems to be the peak of mortgage rates. I honestly don’t understand how people in those countries manage to take out loans under these conditions. Well...

[00:05:02] That’s just how it is. Who, with such inflation and...

[00:05:11]  Olena Dmytriieva: ...high mortgage rates, is taking out mortgages? It’s a big question. I tried to look for this information, but I just couldn’t find it. Maybe you need to know Turkish to find it. I couldn’t find it in English. So, the question that arises from these charts is: Does Ukraine need commercial mortgages? I tried to answer that. Well, maybe you can correct me. For citizens, yes, if it’s affordable and the rates are low, it would be of interest to them. For banks, yes, if there’s demand for it, because right now there is no demand. So, spending resources to maintain a program that...

[00:06:03] ...isn’t really in demand doesn’t make much sense.

[00:06:09]  Olena Dmytriieva: For the state, it’s also a question of whether it’s needed, and the answer is yes, if there’s not enough money for subsidies. As I understand it, the state currently has enough—10 billion for the year. So, for now, commercial mortgages aren’t particularly needed in Ukraine. That’s the overall answer.

[00:06:32] And if we think a bit further and look...

[00:06:37]  Olena Dmytriieva: ...at what’s happening in Europe and how mortgage lending is developing there, the main trends are outlined based on data from Open Credit, which surveyed the largest banks in Europe involved in mortgage lending. The results are very interesting, and I want to share them with you. The biggest trend, with 90% of banks noting this, is the focus on energy efficiency of buildings when providing mortgages. In European countries, lenders are increasingly analyzing the energy efficiency of properties that qualify for mortgage loans.

[00:07:26]  Olena Dmytriieva: How energy-efficient is the building where the apartment is being sold?

[00:07:30]  Olena Dmytriieva: How energy-efficient is the building where the apartment is being sold?

[00:07:33]  Olena Dmytriieva: This question is becoming increasingly important as energy efficiency is now a key consideration in new construction and renovations. You simply can’t get a mortgage if you want to buy a building that isn’t energy-efficient.

[00:07:38]  Olena Dmytriieva: Therefore, the topic of implementing energy efficiency in new construction and renovations is becoming especially important. You simply won’t get a mortgage if you want to buy a non-energy-efficient house.

[00:07:57] The second topic is the uncertainty of interest rates.

[00:08:00]  Olena Dmytriieva: You know that inflation in European countries is quite high right now, and interest rates are similarly high. Looking at Poland, for example, where rates are around 9%, you realize that just five years ago, the rate was 2%. As of now, we can't say that European countries have managed...

[00:08:24] ...to overcome inflation.

[00:08:26]  Olena Dmytriieva: Many of those who responded to the survey highlighted the uncertainty of mortgage rates...

[00:08:34] ...and how this factor affects the development of mortgage lending. The next trend is the use of artificial intelligence during the consultation stage. AI is increasingly being implemented in many mortgage banks in Europe—both in the rating stage, the loan approval stage, and in providing consultations to customers. While this is not yet a dominant trend, it's gaining momentum, and it’s clear that this is the future. Large banks are already thinking in this direction.

[00:08:40]  Olena Dmytriieva: ...interest rates and how this factor influences the development of mortgage lending. The next trend is the use of artificial intelligence (AI) in the consultation stage. AI is now being implemented in many mortgage banks across Europe—not only in the rating process but also in loan issuance and providing consultations to clients. It’s not yet a dominant trend; it’s just gaining momentum. However, the future undoubtedly lies in this direction, and large banks are already considering it. Another trend is open banking.

[00:09:30]  Olena Dmytriieva: ...and access to open data. In this way, European countries are trying to reduce the volume of...

[00:09:34] ...paperwork required from clients, by retrieving data from...

[00:09:37]  Olena Dmytriieva: ...open databases. This is how they are giving access to these open sources, which is a very interesting trend. Hopefully, we will soon stop asking our borrowers for income certificates. There’s a lot to discuss regarding these trends, but that will be the topic of the next presentation. If you have any questions, I’m happy to answer them.

[00:09:44]  Olena Dmytriieva: ...open databases, thereby providing access for users to these open sources. This is a very interesting trend, and we hope that soon we won’t need to ask borrowers for income certificates.

[00:09:57] These trends are a vast topic for discussion, but that will be the subject of the next presentation. If there are any questions, I’m ready to answer them. Now, I’ll ask two questions to the speakers who presented before you, Ms. Olena.

[00:10:24] Oleksandr Chervak: I have two questions. Speakers before you, Ms. Olena, mentioned...

[00:10:27] ...one question that was passed on regarding housing in Ukraine.

[00:10:27] The question is about potential. Are there any studies on market potential? Do you have an understanding of how many residential complexes are being built to get a sense of the hidden supply in today’s market? For example, 10 billion hryvnias were allocated for housing, but the market’s supply today is estimated at 100 billion. Do you have such figures? Are there plans to conduct such research? Specifically...

[00:10:57] Oleksandr Chervak: This question is for Globus Bank.

[00:11:00] And could you comment on something a bit unconventional?

[00:11:08] Oleksandr Chervak: The recent tax changes.

[00:11:10] Specifically, extraordinary taxation due to the need to fill the budget. There are proposals for extraordinary taxation, particularly for financial institutions and banks. How...

[00:11:22] Oleksandr Chervak: ...will this affect the sector as a whole?

[00:11:23] Oleksandr Chervak: How will this impact lending, including housing loans? And to what extent?

[00:11:29] Oleksandr Chervak: Have you studied, analyzed, and assessed the consequences?

[00:11:33] And while you’re thinking about your responses, I’ll pass the floor to Andriy Tarasenko, as we received a related question. Thank you. The question is as follows:

[00:11:46] Andriy Tarasenko: What are the plans for the...

[00:11:47] ...primary market for townhouses in the context of eOselya? Thank you. Thank you for the question. On the...

[00:11:53] Andriy Tarasenko: ...slide, there was information about the changes that were introduced at the beginning of September regarding lending for...

[00:12:02] ...primary private homes. If we’re talking about your townhouses specifically as private homes and not as apartments (since there are different models), it’s permitted.

[00:12:14] Andriy Tarasenko: However, there are some nuances. The issue is that, as of today...

[00:12:21] ...if you have a new permit, you need to register property rights for the future real estate object before selling.

[00:12:29] Andriy Tarasenko: And when transferring ownership of the future real estate object, the rights of the developer are transferred to the buyer. I believe Olha knows more about this and can provide consultation on the matter. This is the issue we are currently facing.

[00:12:54] We are in dialogue with colleagues on what changes need to be made to the regulations to address this problem. But overall, we are in support.

[00:13:08] Andriy Tarasenko: The decision on lending for private homes during the construction phase is in place. If you have...

[00:13:15] ...a property that you can sell as regular property rights under old permits, then nothing is stopping you.

[00:13:22] Andriy Tarasenko: Today, you just need to choose a bank and start the dialogue for accreditation. Thank you.

[00:13:32] Andriy Tarasenko: Thank you. Now...

[00:13:33] Oleksandr Chervak: Ms. Olena, please turn on your mic. Yes, it's working now. Oh yes, Andriy...

[00:13:46] Oleksandr Chervak: Andriy, thank you very much!

[00:13:47] Oleksandr Chervak: Thank you!

[00:13:48] Oleksandr Chervak: If anyone has questions, we’ll address them later this evening! And congratulations on your anniversary! By the way, we’ll have Yevhen Meister with us during the third part of the event, so feel free to ask any additional questions directly. Thank you.

[00:14:01]  Olena Dmytriieva: Yes, that’s actually a very interesting question, and we’ve approached it a few times to figure out how we can evaluate this. Because one thing is the registration, but another is...

[00:14:10] ...how many apartments are there? We’ve really tried...

[00:14:14]  Olena Dmytriieva: ...several times to address this question and haven’t found a solid answer yet because we always run into the issue of lacking input data. The percentage of available apartments is something only the developer knows. If we had a correlation between the sold apartments and the construction stages, we’d be ready to sit down and manually calculate the floors, as we do for all projects, but [00:14:54]  Olena Dmytriieva: ...we don’t have that information. And perhaps there is currently no correlation between the construction stage and the share of available and sold apartments in residential complexes. However, we are not giving up. We are still exploring different ways to evaluate this.

[00:14:54] We have considered trying to estimate how many apartments are sold each month, even with preliminary data. In short, it’s a complex issue, and we are trying to resolve it.

[00:15:03]  Olena Dmytriieva: It’s crucial to understand this. Regarding eOselya, we made an estimate—if I’m not mistaken—that eOselya in 2021 accounted for less than 5% of all apartments sold. But we are all waiting for eOselya to expand further so that this share increases. Ms. Olena, now on to taxes

[00:15:21] This share has increased slightly. Ms. Olena, now on to taxes.

[00:15:33]  Olena Dmytriieva: Actually, the same thing happened last year. Banks were retroactively required to pay about 20 billion hryvnias. Banks paid around 20—well, I might be mistaken—but approximately 10 billion hryvnias in taxes. How does this affect lending?

[00:15:56]  Olena Dmytriieva: Directly, because our lending capacity depends on our capital. If capital decreases, our lending capacity decreases accordingly. So, the 10 billion we paid into the budget meant that lending potential was reduced by 100 billion hryvnias. That’s a significant number. But currently, banks have a substantial buffer in terms of capital ratios. Therefore, just like this yea.

[00:16:00]  Olena Dmytriieva: ...depend on our capital. If capital decreases, the lending capacity decreases accordingly. So, the 10 billion we paid into the budget means that lending capacity was reduced by 100 billion hryvnias. Yes, this is a significant figure. But as of today, banks have a large reserve of capital ratios. Therefore, I believe that just like this year.

[00:16:30] ...taxes have not impacted our lending capacity, and I don’t expect them to impact it next year either. The main factor affecting lending today is the war and the demand for loans. No matter what we say, demand for loans is still lower than it was before the war, and we don’t expect it to grow significantly anytime soon, unfortunately. Only victory will bring about any drastic changes.

[00:16:36]  Olena Dmytriieva: ...have impacted our lending capacity, and it won’t affect it next year either. The main factor influencing lending today is the war and the demand for loans. Regardless of what we say, demand for loans is lower than it was before the war, and we do not expect it to increase significantly in the near future. Unfortunately, we are not counting on that. Only victory will bring about any drastic changes.

[00:17:12]  Oleksandr Chervak: Thank you for the optimistic response, Ms. Olena, and colleagues. Let’s continue. Our experts...

[00:17:19] ...have invited representatives from European companies to share their insights on development policy trends, how their company policies have changed for the future, the challenges they face, and how they forecast the market for themselves.

[00:17:41]  Oleksandr Chervak: And what trends they are focusing on again.

[00:17:45] The first speaker I propose is Anna Anisimova, Head of the Investment and Analytics Department at Intergal-Bud.

[00:17:54]  Oleksandr Chervak: Ms. Anna, please share your company’s vision...

[00:17:59] ...and forecasts. After that, we can discuss further with the other participants.

Anna Anisimova, Head of the Confederation of Builders of[5]  Ukraine (CBU) Development Committee, Commercial Director of Intergal-Bud

[00:18:05]  Anna Anisimova: Yes, yes.

[00:18:06] That’s right. Greetings to all the participants.

[00:18:11]  Anna Anisimova: It’s a great pleasure to see more and more people involved in these open meetings. I would like to share the latest trends with you and complement the excellent presentation by Ms. Olena Montyan.

[00:18:16] and an increasing number of people are involved in these open meetings. I would like to share with you some trends, the latest trends, and complement the wonderful presentation by Ms. Olena Montyan.

[00:18:30]  Anna Anisimova: And regarding the latest data on how...

[00:18:32] ...we spent the summer and where we stand now...

[00:18:38]  Anna Anisimova: ...what we expect from the market...

[00:18:39]  Anna Anisimova: ...by the end of this year? Well, the main trends and prospects are based on our personal analysis. Some facts are from our internal...

[00:18:49] ...company data. So, we will share with you a little about what’s happening with demand, the structure of sales, and the trends we are observing. Yes. Trends and agreements as of September 2022. On my way here, I asked my team to prepare a comparison of what we have today. Let me bring it a bit closer to make it clearer. Today, my team...

[00:19:19]  Anna Anisimova: ...confirmed the following: the summer of 2021 was a relatively sluggish season. I believe every developer noticed this in their sales. We can state that if we compare June to August 2022 with the same period in 2019, sales have dropped by about 10%. This is significant, especially for developers planning to build and complete new projects. However, September gave us a bit of hope, as there was an increase in sales—a recovery in sales. But even if we compare...

[00:20:01] ...September 2022 with the same month last year, sales are still down by 20%.

[00:20:06]  Anna Anisimova: But overall, things aren’t too bad.

[00:20:08] We predict that October and November, which are traditionally active business months, will lead to.

[00:20:16] Anna Anisimova: ...an increase in sales. We expect that these months will bring about a positive shift, and.

[00:20:18] The number of transactions in the primary real estate market will stabilize, and we believe...

[00:20:25]  Anna Anisimova: ...we will close this year with results no worse than those in 2019.

[00:20:30] Yes, yes, exactly.

[00:20:34]  Anna Anisimova: Furthermore, I want to note that Ukrainians currently have money and savings, but they are not in a hurry to invest. After nearly three years of war, we understand that the amount of capital being kept "under mattresses" or in other savings is significant. However, people are holding on to their cash, as they say, and are looking for ways to buy real estate without investing all of their own money into the deal. This is why demand is being sustained for now. And, of course, state programs like eOselya and preferential mortgages are helping. We saw some demand formation at the beginning of the summer when there were challenges with housing financing. Some major players in the market returned to offering their own installment programs. Now, there are even offers for up to 10-year installment plans, which didn’t exist even a year ago. Currently, you can find installment offers from developers for up to 10 years with the first.

[00:21:55] ...payment starting from 10%. And buyers are definitely interested in such programs because...

[00:22:03]  Anna Anisimova: ...again, they are looking for any options to avoid investing 100% of their own funds into the purchase. Even currency risk, as we’ve discussed with our buyers, doesn’t scare them much.

[00:22:17]  Anna Anisimova: They understand that if something happens with the exchange rate or if something goes wrong, they still have enough capital to cover the installment payments. Also, the priority has shifted. Earlier this year, I would have said that buyers were focused on the quality of the project. We had many inquiries about the technical specifications of the project. But now, buyers have only two main questions: what is the price, and how soon can they move in? You can spend a long time talking about how great a project is or how amazing the surrounding area is, but right now, it’s all about the price and how quickly it will be ready for occupancy. This is a trend we’ve been observing since around April of this year.

Regarding prices, I can also confirm the data and add a bit more. According to LUN analytics over the past six months, we’ve seen that housing prices in the primary market have stabilized. So, if we experienced fluctuations—like when the market was actively dropping due to missile strikes—now prices are...

[00:23:34]  Anna Anisimova: ...increasing. Now, I’m pleased to say that the market has calmed down a bit.

[00:23:39]  Anna Anisimova: Management decisions are more measured now. For example, if a critical situation occurs in a region, no one rushes to give a 10% discount. Everyone understands that we just need time to recover.

[00:23:51]  Anna Anisimova: The discounting strategy isn’t really justified because it’s difficult to return to normal, current prices afterward—prices that are reasonable for developers to sell at.

[00:24:07] Overall, the market is ready to buy.

[00:24:11]  Anna Anisimova: September confirmed this. We expected sales to rise in September, and they did. In October...

[00:24:19] ...we already have a substantial number of applications, meaning there will be many signed deals. This is, of course, due to seasonal demand. Housing continues to support us by doing everything possible to attract additional funding for the program and sustain demand. So, people are buying ready-to-move-in housing, as I previously emphasized. But with a focus on properties that are cheaper and can be completed and ready for move-in within the next six months. This trend has persisted.

[00:25:01]  Anna Anisimova: This trend has persisted for the past two and a half years. We see it, and we understand it.

[00:25:05]  Anna Anisimova: But now, the emphasis is even more on choosing cheaper options...

[00:25:10] ...to invest less money in case of an unforeseen situation and to avoid losing all their savings. I wanted to share some data with you...

[00:25:24] ...about the demand structure for apartment sizes. Yes, we...

[00:25:29]  Anna Anisimova: ...see that due to what I mentioned earlier—buyers’ desire to save a little and invest less in real estate—demand has shifted from three-room apartments last year to two-room apartments this year. One-room apartments...

[00:25:49] ...are more or less always in stable demand. About half of buyers still consider one-room apartments. But the percentage of two-room apartment sales is significantly higher and better than it was in 2019.

[00:26:05] Because 2019-2020 was the year of investment—a time when everyone...

[00:26:11]  Anna Anisimova: ...was investing in real estate either to resell or to rent out. When we see a higher percentage of two-room apartment sales in the structure, we understand that people are now buying homes for themselves.

[00:26:26]  Anna Anisimova: So, once again, I emphasize that as a developer...

[00:26:32]  Anna Anisimova: ...we are now taking into account the preferences of our clients and offering apartments with renovations. There is an option for apartments with renovations and furniture. Over the past two years, these make up about 10% of our sales structure. And if we compare it with 2012, we see that approximately 100 of the sales are apartments with finishing. The emphasis, once again, is on moving in as quickly as possible.

[00:27:01] ...and starting to use the apartment immediately rather than engaging in...

[00:27:06]  Anna Anisimova: ...creative projects like designing, because that takes time and money.

[00:27:10] And unfortunately, with personal renovations, it’s unknown when the work will be finished. Now, a bit more of our data—perhaps we can enlarge the chart for better visibility—regarding the average price...

[00:27:26] I’ll make a brief comment. What we see...

[00:27:32]  Anna Anisimova: ...is an increase in the average transaction value. This data is for Kyiv, specifically the central area. We can see that despite various events on...

[00:27:48]  Anna Anisimova: ...the market over the last three months, the average transaction value has increased. In August, I can definitively confirm (though we haven't calculated for September yet) that the average transaction value increased by $10,000, reaching about $100,000 per apartment. So, as my colleagues from London mentioned, they are looking at the market for one-room apartments...

[00:28:15] I’ll add that with this budget, people come to Kyiv’s primary real estate market. The average amount is between $10,000 and $20,000 for an apartment, which is a comfortable range.

[00:28:25]  Anna Anisimova: A good two-room apartment with a high level of readiness, preferably with finishing and renovations, is in demand. You can also see below a chart regarding...

[00:28:36] ...the year-over-year growth of the average cost per square meter. As our colleagues commented, and what we also see thanks to LUN, the average price per square meter...

[00:28:51] Anna Anisimova: ...continues to rise. I would like to note that this chart is based on actual deals, not just listing prices. It’s not just about hoping whether we sell it or not—these are actual deals. So, we see that, despite everything...

[00:29:05] ...the average price per square meter grew during the summer, and as of August...

[00:29:13]  Anna Anisimova: ...the increase was about $200 per square meter.

[00:29:15] It’s not bad, but again, this data can be interpreted differently—it all depends on readiness. For example, if...

[00:29:24]  Anna Anisimova: ...there are more offers on the market for ready or almost ready-to-move-in properties, and there’s less new construction, then it’s clear that the average price will rise. The more ready...

[00:29:40]  Anna Anisimova: ...a project is, the higher the price. Now, regarding payment terms: in 2010, we can state the following. Since there were financing issues in the third quarter of 2009...

[00:30:05]  Anna Anisimova: ...and mortgage programs at that time...

[00:30:13]  ...did not meet client demand—especially with the “Oselya” program—the share of bank loans in sales structure dropped to 90%, and attention turned to developer installment plans.

[00:30:28]  Anything longer than a year now makes up 10% of the structure.

[00:30:30] A year ago, 100% was paid upfront, so there was more...

[00:30:36]  ...full payments by clients. But now, buyers are looking for either installment plans or financial support from the state.

[00:30:48] The sales structure now looks like 10–20%. I think, more or less, this data is consistent across the market for...

[00:30:53]  ...all developers. Regarding trends, I mentioned earlier that there is still interest in two-room apartments, slightly larger...

[00:31:08]  ...with higher quality standards. There is also a focus on safety factors in projects, which remains a priority for buyers.

[00:31:21]  Anna Anisimova: The availability of a shelter is a crucial factor.

[00:31:24]  Another insider insight from our sales data is that currently, buyers prefer apartments not higher than the tenth floor. You can talk as much as you like about how everything will be fine and that we will rebuild, but projects above ten floors and apartments above the tenth floor are simply not in demand now. Before the war, of course, everyone wanted to enjoy the beautiful views of the city or parks from their windows.

[00:31:54]  But even though new projects are being built, and that’s encouraging, they are still few in number. Most of them are projects that developers announced before the start of the war, and now they are completing them. At the moment, our company plans to launch two entirely new projects in Kyiv by the end of this year. These projects will continue into 2020. We also started three new projects in Lviv from scratch, and it's quite challenging due to the shortage of labor. Unfortunately, this is an issue we face. Secondly, the uncertainty related to the energy crisis and what lies ahead this winter.

[00:32:55]  It's clear that building during the winter without power will be very difficult.

[00:33:01]  Also, we should look back a bit at the presentation. I would like to note that speculative demand from investors is either completely absent in some projects or very low.

[00:33:20]  If previously speculative demand was at the pit stage, now we see speculative demand only when a project is very close to being completed, three to four months before being put into operation.

[00:33:39]  Key market challenges have been discussed multiple times, and they include the rising cost of construction. Developers now face a difficult choice.

[00:33:51]  How do we keep prices in line with buyers’ purchasing power while building quality projects that provide shelters, parking, and energy-saving systems? Many developers are already implementing systems that will ensure alternative power sources. This includes solutions for powering buildings to ensure that elevators and pumps continue functioning during power outages. The lack of skilled labor is also a challenge for developers, as well as for the banking sector, which also requires qualified staff.

[00:34:39]  Unfortunately, the number of vacancies per person is astronomical. Nevertheless, we believe we can endure.

[00:34:44]  The key is determination.

[00:34:59]  As the previous speaker mentioned, there is a backlog of demand, but due to financial restrictions and military risks, even the number of ready-built properties we have does not satisfy that demand. This is a complex issue that sparks a lot of discussion. Everyone is assessing their financial risks before deciding to invest in an apartment in Ukraine.

[00:35:31]  Overall, if there are any questions about current construction practices, I’d be happy to address them. We’ll summarize after the speech from Creator-Bud. Before we move on, I’d like to mention some trends.

[00:36:02]  If these are your projects...

[00:36:04] Oleksandr Chervak: Do you currently offer alternative power sources for some of your properties? I suggest we discuss this further after Dmytro's speech.

[00:36:13] Oleksandr Chervak: You recommended it, and now you're exploring foreign investment as a separate development area. Could you briefly share your insights on assessing risks? Dmitro, if you could evaluate risks related to labor shortages, construction materials, energy resources, and the servicing of new projects, that would be helpful. We understand these are just estimates, given the closed format of this meeting. Could you provide your predictions on price dynamics based on these factors? Dmitro, the floor is yours.

Dmytro Struk, Development Director at KREATOR-BUD

[00:00:00]  Dmytro Struk: I think we should honestly discuss the problems, realities, and where we are now, and how we can move forward.

[00:00:11]  Dmytro Struk: How we can find synergy, unite, and help make things happen. Not just creating, but moving forward, and we are building.

[00:00:24]  Dmytro Struk: And despite the war, we resumed our construction projects in Lviv and Ternopil as early as April. In Kyiv, we resumed construction in May 1991. Briefly about the company. For those who may not know or haven't invested with us yet. Our company has been in the market since 2009. It is a regional company from Ternopil, which is currently building in Kyiv, Lviv, and Ternopil. And now we have entered the Polish market.

[00:01:07] Last week, we presented our income-generating real estate project in Katowice.

[00:01:11]  Dmytro Struk: An important point is that it comes with a guaranteed return on investment.

[00:01:22]  Dmytro Struk: That is, we have a guaranteed minimum income per square meter for the investor, provided by the management company. This is one of the trends in diversification.

[00:01:35] One of the directions is income-generating real estate in Poland. This is our first project. But regarding Kyiv...

[00:01:43]  Dmytro Struk: We will have similar cases. I’ve been with the Creator company for almost five years. I am the Director of Development, responsible for various areas of partnership, negotiations, and the implementation of new trends and interesting challenges that we are currently facing. We are overcoming them together. Katar City is our flagship project in the city center, near the Lukianivska metro station, with a large park. This is a certain trend that we announced even before the war. We are probably the first developer to announce that we would create our own park, instead of just building next to or around a park and saying, "Look, we have a park." We said, "We will create a new park for the city." This is a cool trend, and I think it can and should be scaled further.

Regarding the business class, there was no segmentation discussed today. Unfortunately, business-class and premium housing are not selling well. We acknowledge that our flagship business-class project has sales, and we offer installment plans. During the war, we told our investors that during this time, they could take a break from payments. But in October 2022, we informed them, "Look, you are investors, you are our partners, we are building, and over the past six months, we've made progress. You can see our movement, so please continue your payments."

[00:03:34] People understood this and accepted it.

[00:03:36]  Dmytro Struk: People reacted appropriately because this is an important story both for the developer and the investor. Here are a few photos of our flagship project's curator.

[00:03:52]  Dmytro Struk: Now, let’s talk about trends: accessibility, speed, and economy. On this slide, there are two of our projects. On the left is the Dnipro Island project, a large residential quarter development. This is a project we started during the war, located on the left bank, near residential complexes like River Stone and Sevan. It’s a great location, and we launched it during the war. Considering the current situation, where people are less willing to invest in high-rise buildings, we decided to be the first on the left bank to build lower-rise buildings, six, nine, and twelve floors. Currently, this is a unique aspect for the left bank. We understand that, as developers, we are reducing our margins. But the second important trend is speed. By understanding that we don’t have two floors underground for parking, we are utilizing the natural landscape slope to include underground parking. We will be able to build these houses not in two and a half or three years.

[00:05:18] Plus or minus, we expect and understand that it will take around a year and a half.

[00:05:23]  Dmytro Struk: We have evaluated this situation. People want to move in within a predictable timeframe. On the right is the Gravitation project and park. I will also talk about it and come back to it later. We slightly redesigned this project. Initially, we had planned buildings of up to 10 floors, but for the next phase, we have reduced the height. Now, the buildings will be four floors high for the Gravitation project and park.

[00:06:00] This is the entrance to Kyiv, along Peremohy Avenue.

[00:06:08]  Dmytro Struk: I forgot the exact name—it's near Beresteiska 200, by the Zhytomyrska metro station, close to a lake. It’s a beautiful area, almost like a club-like development in the forest, covering 20 hectares. We acquired this land at an auction. Here's a great example of high-quality European architecture that we are creating. These buildings will have elevators, despite being only four floors high, and on the left, there are nine-story buildings. We plan to have one completed and ready for occupancy this year. The four-story buildings are already up to the second and third floors.

[00:07:04]  Dmytro Struk: Here’s a live photo of the Gravitation park, where we are currently at the second or third floor.

[00:07:16]  Dmytro Struk: Coming back to today's topic of trends, we are about to start sales for the next phase.

[00:07:24]  Dmytro Struk: In fact, we are already at the level of the third and fourth floors. We are currently building with our own funds and starting with the message of Graffiti Park. This is a completely independent building. I won’t go into details about the policies of what exactly we will have, but one of the trends is important. A key point here is gas—gas stoves and gas heating. This is also an important factor for us today. Another trend is income-generating real estate specifically for investors. As part of the Graffiti Park project, we will have a hotel managed by a management company with a clear understanding of the return rate. As an investor, I know I have money in cash under the mattress, and I don't want to risk the entire amount. But I have a convenient installment plan from the developer, currently up to three years with a down payment of 10%. This is for investors, not speculators who used to come in early at the foundation stage, but for those who understand that investing in real estate is an investment for future generations. We understand that the return on investment here is not 10 years; we calculated it at around 10 years at most. This is for Ukraine.

[00:08:45] And in Katowice, in our project, the return on investment is also 10 years. Again, I am talking about a pessimistic forecast of returns in the current situation where we are still in a state of war, which is another important point.

[00:09:01] In the first phase, we had relatively large two-room apartments.

[00:09:07]  Dmytro Struk: Around 100-120 square meters. Now, in the new phases, we have reduced the size of the two-room apartments, and they will be around 60-70 square meters. You all understand well the price per square meter and how that multiplies with the number of square meters. I don’t know about you personally, but I used to travel a lot before the war and rented housing on Booking.com. And when you're in Berlin or Amsterdam or somewhere else, a 60-70 square meter two-room apartment is the norm for them. Since the early 2000s in Ukraine, two-room apartments had to be no less than 90 or even 100 square meters. With the right economy, we now understand that it is absolutely possible to create a high-quality two-room apartment in 60-70 square meters. Moreover, a smart apartment, which also has a relatively small area of 30-40 square meters, is also completely normal. I once lived in Paris in a 30 square meter apartment for a week with my girlfriend, and it was absolutely fine if everything is done correctly. I also invested in Kyiv.

[00:10:32] In several projects with smart apartments, they are doing very well when rented out. It's a great income-generating story.

[00:10:38]  Dmytro Struk: We also understand that this trend is something we are carefully considering, and in some cases, we will reduce the apartment size. Again, the trend of income-generating real estate is significant for us as developers at Creator-Bud.

[00:10:53]  Dmytro Struk: I think this year we will announce a very interesting case with the most practical apartments. So, one of the trends is that we have slightly reduced the size of our apartments. For example, Dnipro Island. This project on Osokorky offers a 58 square meter, comfortable two-room apartment that has everything you need. Previously, in our projects, two-room apartments started from 70 square meters.

[00:11:22] In our current projects, we’re seeing that even 58 square meters is absolutely comfortable. It’s a great story. One-room apartments at Dnipro Island are also small, around 40 square meters, with a great separate bedroom. You can agree that there is a difference between buying a 40 square meter apartment and a 70 square meter one, not just in the initial investment but also in the renovation cost.

[00:11:51] Now, let’s delve a little into our Dnipro Island project. The architectural firm of Anna Skyrda...

[00:11:59]  Dmytro Struk: They are our partners on several projects.

[00:12:02] We never skimp on architecture.

[00:12:05]  Dmytro Struk: The idea of cheap housing is not about us. We have moved away from the copy-paste model where identical houses are built. Instead, we focus on block development, where each building is unique and interesting. This way, investors and end buyers have a wide variety of apartments to choose from.

[00:12:30]  Dmytro Struk: This project, with its terraces, is something we are very proud of. In fact, we aim for this development to become a landmark on the Left Bank of Kyiv. That’s our goal, and that’s what it will be.

[00:12:46]  Dmytro Struk: Regarding the Dnipro Island development, despite the war, we evaluated and had team discussions—a sort of brainstorming session—about what exactly we wanted to achieve.

[00:13:01]  Dmytro Struk: So, these are the trends I tried to share with you. I hope you found them interesting. Thank you for your attention. I’d be happy to answer any questions you may have.

Oleksandr Chervak: Thank you, Dmytro. Now, before we move on to Olha, the questions I asked earlier about pricing, forecasts, and your investment strategy abroad—let’s start with prices.

[00:13:31]  Anna Anisimova: As I mentioned during my speech, autumn is traditionally a period when demand and sales increase. As a result, developers often take advantage of this opportunity to adjust prices accordingly.

[00:13:44] There will be a correction. As we saw on the slide, the average price for transactions even during the difficult months—let’s say, June through August—increased by $100. So we expect that by the end of 2024, before we enter the active holiday season, we might see an increase in the average price per square meter by around $100 to $200. Everyone calculates this individually, but the expectation is certainly there.

[00:14:25]  Anna Anisimova: We hope everything will go well, and project revisions will take place—this is a fact. However, developers are very cautious about price adjustments, and it won’t happen all at once. It will be gradual. I believe most developers will raise prices, see if there are still sales, and then, if possible, raise them a bit more—carefully and gradually. But it will happen because we want to complete the projects, and that requires funds. Of course, companies like Creator might finance part of the construction from their profits, as many developers do. But to compensate for these projects, prices will gradually rise throughout the construction phase.

[00:15:21] Anna Anisimova: If we move in harmony with the market and understand its potential, it’s possible to increase prices without halting apartment sales. Regarding your second question about investments abroad—this year, we officially announced our first international project, a residential complex in Budapest. If we compare it to the Ukrainian market, it is closer to business class, but by Hungarian standards, it is more of a high-comfort residential complex. We are building this for the local population.

[00:16:14]  Anna Anisimova: Despite the war and the challenges we're facing—lack of workers, lack of materials, and constant concerns about how missile strikes will affect our sales—I can state that the Ukrainian real estate market is more promising. That's why we've decided to complete our significant projects, where the construction area will exceed 100,000 square meters, rather than starting new developments in another country, like Germany. We've given the European market some time to stabilize because, unlike in Ukraine, most European markets rely heavily on mortgage programs provided by local authorities. For them, buying without a mortgage is almost unimaginable.

[00:17:19] In Hungary, we've made a breakthrough by offering discount programs and promotions, even though market experts told us that selling real estate in Hungary without mortgage programs would be impossible. I can confirm that after two years of effort, we succeeded. So, it really depends on the developer's creativity, willingness to take risks, and readiness to apply their experience to European projects.

[00:18:09]  Anna Anisimova: I’m proud to say that our designs, architectural solutions, and marketing strategies from Ukraine are advanced, innovative, and superior in many ways to those in Europe. Except for some excellent energy-efficiency practices, many European projects fall short of what we can achieve in Ukraine. Their developments are often standardized, restrained, and lack the creative flair that we bring. There’s no desire to push boundaries or make something beautiful and iconic. In contrast, Polish developers are more creative and active, but for now, we've chosen the Hungarian market, despite political concerns.

[00:18:53] I always remind people, even in Ukraine, we had a president like Yanukovych—some things were good, some were bad—but he didn’t represent the people's sentiments. It’s similar with Viktor Orbán in Hungary. The Hungarian people are active, sincere, and generally supportive of Ukraine. Their government’s policies don’t necessarily reflect their views.

[00:19:56] Oleksandr Chervak: By the way, the mayor of Budapest is in opposition to Orbán. He’s a great person, and in that area, they've banned the sale of apartments to Russians. In fact, they are only allowed to buy in two districts of Budapest now.

[00:20:15] Anna Anisimova: Yes, the mayor of Budapest and the district administration have prohibited property sales to Russians. It’s a painful issue for them, but they stand firm on it.

[00:20:25] Oleksandr Chervak: But it’s a principled stance. Alright, Anna, thank you for your response. Dmitro, could you share your thoughts on pricing? What are your expectations for pricing policy in your projects?

[00:20:39]  Dmytro Struk: Sure. Regarding business-class projects, like our Creator City project, it’s priced at $2,300 per square meter, and we haven’t lowered that price. We’re not offering discounts. Occasionally, we test the waters with offers like ‘Apartment of the Month,’ focusing on less desirable units that are harder to sell. We offer slight discounts for those. But overall, as colleagues from LUN will confirm, business-class properties are selling slowly these days. We don’t have an economy segment in our portfolio. In the Comfort Plus category, for projects like Dnipro or Gravitation, our pricing strategy is between $100–200 per square meter for full payments, with installment plans adding a 10–20% premium.

[00:21:38] Oleksandr Chervak: Thank you, Dmitro. Colleagues, we now move to the final segment, where we’ve prepared a legal block specifically for you.

[00:00:00] Regarding changes in the legal mechanisms for financing construction projects.

[00:00:05]  Oleksandr Chervak: We will touch on reforms and the latest explanations from the State Inspection of Architecture and Urban Development (DIAM) regarding commissioning of buildings, obtaining permits, fire safety issues, and the challenges related to cultural heritage protection. Olha Sydorchuk, Head of the Committee on Regulatory and Legislative Activities, will present.

[00:00:18] Olha, we have just a brief segment.

[00:00:23]  Oleksandr Chervak: I’m not sure we’ll have time for an extensive discussion, but during the coffee break, you can certainly engage in conversations.

[00:00:32]  Oleksandr Chervak: Olha, you have about 20 minutes.

Olha Sydorchuk, Head of the CBU Committee on Regulatory and Legislative Activities, and Head of SEMPRA LAW, familiarized the attendees with the legal aspects of development.

[00:00:39]  Olha Sydorchuk: Thank you. Good day, friends!

It’s great to see everyone here. In brief, the current state of development presents significant challenges for developers, and the legal aspects are no exception. Over the past two years, approaches to financing construction projects have changed significantly, as have the approaches to obtaining permit documentation.

[00:01:10]  Olha Sydorchuk: In the construction industry, we are already in the process of significant digitalization, which is also impacting the legal aspects, adapting to new legislative requirements. It’s no secret, and I believe most developers have already felt the impact, that on October 10, 2022, a significant event occurred in the development market. The Law of Ukraine on Guaranteeing Property Rights to Real Estate Objects that Will Be Constructed in the Future came into effect. This law has fundamentally changed approaches to both financing construction and obtaining permit documentation.

Specifically, this law clearly defines three main ways to attract funds for construction:

1. Through the sale of future real estate objects—a new term introduced into the legislation.
2. Through agreements involving participation in construction financing funds.
3. Through the issuance of targeted bonds.

However, in practice, I believe close to 0% of developers use the last two mechanisms, while the first mechanism—through the sale contracts—has raised many questions. The law outlines over 10 essential conditions for such contracts, imposes clear obligations on developers regarding construction timelines, the commissioning of the building, and the technical characteristics of the new structure. It also broadens the obligations of developers toward the buyers.

[00:03:02] It also clearly defines what a developer is, as this term is now included at the legislative level. It also regulates the relationship between developers and contractors, specifying what type of contract must be signed between them, how this contract should be formalized (notarized), and how future real estate objects are divided between the developer and the contractor. Additionally, changes were made regarding the process of obtaining construction permits. For those who are familiar with working on projects, starting from 2021, it became necessary to register every component of a project in the project documentation. Each individual element, such as a specific apartment, parking space, or commercial unit, now needs to be assigned a unique construction identifier even at the design stage.

[00:04:16]  Olha Sydorchuk: Addressing technical indicators and documentation is now required. Without it, you won't be able to register special property rights to future real estate objects and thus, you won't be able to sell these properties during the construction phase to buyers. Requirements for developers during the construction phase have also changed. As of today, developers must disclose information about the construction project, including the number of sold and available units for sale. This information will likely be useful for future statistics and must be updated on a special website maintained by the developer. Non-compliance with these requirements comes with penalties. Additionally, changes were made to the registration process for ownership of newly constructed properties.

Specifically, many developers may not be aware that in June 2019, amendments were made to the resolution regulating the registration of newly built properties. It is now stipulated that for projects permitted after 2020, property ownership can be registered either in the name of the developer or the person with a registered special property right. This means that if investment agreements made after 2020 stated that ownership would pass to a third party after commissioning, unfortunately or fortunately, depending on your perspective, registration cannot be done this way due to restrictions on the registrar.

[00:06:12] Changes were also made regarding the taxation of future real estate objects. A cash-based method for VAT was introduced, as well as the taxation of VAT for the first sale of residential properties. When talking about the legal challenges today related to development, one major issue is the lack of consistent practice and clarity from tax authorities, the National Securities and Stock Market Commission, concerning the involvement of collective investment institutions in financing mechanisms under the new law, and from the State Consumer Service regarding the functionality of the developer's website. Over time, these challenges may bring surprises for developers who started following the new law, but I hope they will be positive surprises, and the vision of regulatory bodies will align with the needs of developers.

Those who have started projects under the new law are truly paving the way for healthy and responsible development practices. We'll see more of this in the future.

The next point is the ongoing urban development reforms. In recent years, following the reorganization and effective dissolution of the State Architectural and Construction Inspectorate (DAABI) and the creation of the State Inspectorate for Architecture and Urban Planning of Ukraine (DIAM), reforms in urban planning have been actively happening, especially in the area of digitalization. This includes the complete digitalization of processes for obtaining construction permits and commissioning buildings. The goal is to minimize direct contact between the service recipients and the decision-makers to reduce corruption risks. It’s also important to highlight the creation and functioning of the Unified State Electronic System in the field of construction (UESCC).

[00:08:25]  Olha Sydorchuk: I believe many of us have already experienced working within the system. Despite the fact that the system has its complexities and there are critical errors that arise from time to time, I can confidently say that those who understand how to work within it, those familiar with the logical steps of the State Electronic System in Construction (UESCC), will definitely be able to register projects and obtain permits without any corruption-related issues.

A new development is the creation of the national urban planning cadastre. There is already a decree in place that regulates the operation of this cadastre, obliging local governments to digitize existing general plans, zoning plans, and other related documents. This means that soon, all of us will have access to the urban planning cadastre, where we can easily look up any restrictions on a plot of land without having to visit local government offices. Importantly, this information will be openly available to everyone.

Of course, another significant reform for all of us is the creation of DIAM (State Inspectorate of Architecture and Urban Planning of Ukraine). As I’ve mentioned on my Facebook page multiple times — and I may seem like an unofficial PR manager — I am very grateful to DIAM's staff and its head, Mr. Oleksandr Novytskyi, for the reforms they are pushing and their willingness to cooperate with developers.

[00:09:57]  Olha Sydorchuk: If you're obtaining new permits, they will proactively reach out to you to explain and clarify any issues. You can always communicate with them because this institution has a zero-tolerance policy towards corruption. I can confidently say that our clients have experienced this firsthand and have successfully obtained permits without any problems, often on the first attempt.

What's especially encouraging is that recently, DIAM has launched.

[00:10:34]  Olha Sydorchuk: ...an informational campaign regarding the process of putting buildings into operation. If you check DIAM’s YouTube channel, you’ll find several new videos explaining the key requirements that must be met concerning fire safety, inclusivity, ventilation, air conditioning, and other factors when commissioning new buildings. They also highlight what inspectors focus on and what will be decisive when deciding whether to issue a certificate for a newly constructed building. DIAM has also released a checklist regarding the commissioning process.

[00:11:16]  Olha Sydorchuk: This checklist is available on the DIAM website and outlines the necessary documents and specific requirements related to inclusivity, lightning protection, fire safety, electricity, gas supply, water drainage, and more — all the factors that the DIAM inspector checks for. Additionally, the checklist includes contact details, so you can schedule a visit with DIAM, and I can confidently say that they will engage with you. At a minimum, your issue will be acknowledged, and, ideally, resolved.

I also want to mention some local initiatives. In Kyiv, for example, there is currently a program called "Home Plus Rent-to-Buy." This program allows individuals to rent an apartment in a newly built, renovated property with the option to purchase it. The rent payments can be deferred over a period ranging from 2 months to 10 years. The program was initiated by the municipal company Housing Investment Financial Company, founded by the Kyiv City Council. To participate, you need to submit a minimal set of documents to the municipal company, choose your apartment, and sign a lease agreement with the option to buy. The first payment is a minimum of 5%, and subsequent payments consist of rent and an accumulative payment. This effectively spreads the cost of the apartment over 10 years with no interest. Additionally, you’ll only need to cover utility payments.

As an added benefit, there are certain rental payment discounts available for internally displaced persons (IDPs) in need of temporary housing.

[00:13:34] In conclusion, I would like to highlight the challenges and issues related to the protection of cultural heritage.

[00:13:44]  Olha Sydorchuk: When planning urban development, it's crucial to take cultural heritage into account, especially given the complex relationship between urban planning and public perception of how the city should develop. A positive development over the last two years is that the Ministry of Culture and Information Policy has finally started approving construction projects for areas within historical zones, which was difficult to achieve for a long time. As of today, projects within these zones can be approved within 10 days via the DSV system. Additionally, as of January 1, 2019, there is no longer a requirement to obtain a separate permit from the Ministry for urban, architectural, or land works within historical zones or protected areas. This has simplified the process, but...

[00:14:54]  Olha Sydorchuk: Given the current situation and well-known controversial cases in Kyiv and other cities, it’s important to note that the legislation on cultural heritage protection still needs to be updated. First and foremost, I believe that the boundaries of historical zones and master plans of cities must be clearly defined and approved.

[00:15:21]  Olha Sydorchuk: In many cities, these boundaries have either not been officially approved or have been approved with violations, leading to numerous legal disputes between developers and the Ministry of Culture and Information Policy. This affects the issuance of urban planning permissions and the enforcement of restrictions.

[00:15:42]  Olha Sydorchuk: There is also a need for clearer regulation of the procedures and processes for accounting cultural heritage sites.

[00:15:48]  Olha Sydorchuk: ...heritage, assigning a site the status of a monument, and establishing clear criteria for determining whether a site has architectural value. There is currently a lot of subjective interpretation in this area, including opinions from self-regulating organizations, which leads to certain conflicts within society. Effective communication with the community is also essential, as developers who have obtained all the necessary permits and legally have the right to build often encounter resistance from the public, who may have a different vision for the project. In such cases, public dialogue is crucial because cities are built for the people who live in them. That is the current situation, and if you have any questions, feel free to ask, though I believe...

[00:16:47]  Oleksandr Chervak: We might not have time for questions right now. Thank you, Olha. Colleagues, I suggest we move the questions to the coffee break area. We are running about 10 minutes behind schedule, so after a 30-minute break, we'll begin the third panel or rather the Board of Directors meeting.

[00:17:09]  Oleksandr Chervak: Joining us will be Natalia Kozlovska, Deputy Minister of Infrastructure, Olena Shuliak, Head of the Relevant Committee of the Verkhovna Rada, Oleksandr Novytsky, who Olha mentioned, Yevhen Meister, and representatives from the Oselya program, along with other esteemed guests. We'll see you back in this room in half an hour. Please allow us to prepare the room for the upcoming session.