Construction costs in Ukraine have doubled since start of war – DIM

Since the onset of the full-scale invasion, the cost of housing construction in Ukraine has risen by 90% to 115%, depending on the housing class—a trend that continues, according to Volodymyr Zhyhman, Head of Project Support Office at DIM Group, in a statement to Interfax-Ukraine.

Since the beginning of 2025 alone, construction costs in the comfort+ segment have increased by 17%, reaching $850-1,000 per square meter. Zhyhman explained that this significant rise is driven not only by more expensive building materials, but also by a chronic labor shortage and a crisis in the supply of key materials.

"Today, only 40-50% of the pre-war construction workforce remains. Some have left the country, others have joined the Armed Forces. There's a shortage of qualified welders, crane operators, high-rise workers, equipment operators, and even general laborers," Zhyhman said.

To mitigate the labor deficit, companies are raising wages, bringing in contractors from other regions, and in some cases, even from abroad.

As for construction materials, DIM estimates that from February 2022 to May 2025, average prices have increased by 40% to 60%. For instance, the price of concrete has nearly doubled due to higher fuel costs, logistical challenges, and a 30-40% decline in production capacity compared to pre-war levels. The cost of drywall has gone up by 35-45%, driven by more expensive raw materials – particularly gypsum – and rising energy costs.

Similarly, plaster costs have increased by 30-40%, due to more expensive cement, fillers, and energy resources. Tile prices have soared by 50-60%, largely because of import dependence, rising logistics costs, and energy price hikes. According to DIM's analysis, the share of imported materials in the average construction project has nearly doubled – from 12-14% in 2021 to 23% in 2023, and almost 25% in 2024.

"Most of the elevators on the market are imported, as are ventilation systems and electrical equipment. Add logistics, exchange rates, and risk premiums – and you've got your answers to the upward pricing trend," Zhyhman said.

In 2024-2025, developers are increasingly relying on technical optimization, thoughtful design, and transparent communication with buyers. In an industry where construction costs are now approaching market prices, these measures are not just about profitability – they're about survival, the expert said.

"Rising construction costs have become the new normal. The question isn't whether it'll get more expensive – it's how to stay competitive without sacrificing quality or pace," added Arseniy Nasykovsky, junior partner at DIM, as quoted in the company's statement.

According to Nasykovsky, flexibility in design, anticipating logistical risks, and systematic collaboration with contractors will be key competitive advantages for developers in 2025 and beyond. "The market is entering a phase where the winners won't be the biggest players – but the most efficient ones," he said.

DIM's real estate portfolio includes over 900,000 square meters of property in Kyiv and the Kyiv region. The company has delivered 3,670 apartments and built over 356,000 square meters of residential and commercial space. It currently has six projects under construction totaling over 346,000 square meters.