Social and economic problems of investment activity in housing construction

Інвестиції в будівництво

Today, the problems of housing construction become increasingly acute: settlement of demand and supply in the housing market, its inadequate financing, the imperfection of the legislative and regulatory framework of the construction complex, the low solvency of consumers, etc. The list of these restraining conditions for support of the investment procedures is much broader, therefore, there is a need for a detailed analysis of the trends of their current state and development prospects in general.

Meeting the needs of people in housing is a relevant economic and social problem. Currently, there are many problems in the area of housing construction, both at national and regional levels. This, in particular, makes actual the issue of investing and financing the housing construction with the use of non-state funds attracted from individuals and legal entities. For example, it is extremely difficult to solve the issue of obtaining accommodation by young families who do not have the necessary income. This day, the level of provision of young people with housing in Ukraine is very low. Financing of housing construction from the state budget is clearly insufficient and cannot settle such a situation.

The problem of housing affordability for citizens with different income levels remains unaddressed too.

Now, the main problems hindering the optimization and improvement of the investment environment, the development of investment competition in the area of housing construction include:

  • discrepancies between the documentation of some construction companies and the requirements of legislation, which slows down the construction;
  • shortage of regular labor force in the construction industry;
  • insufficient volume of living space per capita;
  • wear of housing;
  • the growth of housing prices, which makes it unaffordable for the disadvantaged population;
  • reduced potential of the city budget to finance the construction and reconstruction of the housing;
  • lack of housing which can be provided to the residents in case of sudden loss of their own housing (due to a fire or other force majeure circumstances.

State interference and support are needed to overcome the existing problems in the construction industry.

Therefore, in order to increase the efficiency of investment processes in housing construction in Ukraine, it is necessary to implement measures such as:

  • improvement of regulatory and legal support of the construction process, first of all, in the area of investments in construction;
  • improvement of the mechanism of implementation of state financial programs for the provision of affordable housing to the population, public support of the investment projects;
  • development of residential mortgages and state support of commercial banks, which provide the mortgage programs;
  • decreased interest rates and facilitated access to credit resources;
  • granting of tax exemptions to social housing developers;
  • elimination of the bureaucratic hurdles and shortening the terms of approval of permit documents.

However, it should be noted that the development of the state of investments in housing construction in Ukraine will directly depend on economic and social stability in the country. Therefore, the state policy should be aimed, first of all, at reducing the inflation, restoration of economic growth, stabilization of the money circulation, reducing the budget deficits, strengthening of the national currency, and improved welfare of the population.


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