In 2024, companies and legal entities bought more land, increasing their share from 10.3% to 25% of land purchased, Roman Neyter, research associate at Kyiv School of Economics (KSE) said while presenting the KSE Agricenter report «A Year of Business in the Land Market: What Has Changed».
The land market in Ukraine, opened in 2021 after a long moratorium on the sale of agricultural land, continues to grow, but lags behind other “developed markets” by almost a third, Neyter said.
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According to research by KSE Agricenter. The average size of the purchased land plot for companies is 35 hectares
“However, these may be buyers who previously concluded agreements as individuals, and now they are buying land through a company,” Neyter said.
After the market opened, 1,500 legal entities purchased land, concluding 18,500 agreements for 53,000 hectares, KSE Agrocenter estimated.
However, some of them were for the legalization of deals made when the market wasn’t functioning legally, Neyter said.
About 75% of legal entities purchasing land are agricultural producers, mainly focused on grains and oilseeds. Another 25% are companies involved in real estate transactions.
Large agricultural companies, with land holdings between 2,500 and 7,000 hectares, pay the highest prices for land.
The lowest prices are paid by medium-sized farmers, with land areas between 300 and 1,000 hectares.
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Meanwhile, investors pay less for land than small farmers but more than medium-sized farmers, the KSE report says.
After the market was opened to companies, individual buyers began paying 10% more for land purchases.
To assess the market volume, it is necessary to compare the amount of land in circulation with the total land area, Neyter said. In Ukraine, this ratio is 0.77%, which is lower than in other developed land markets, where the ratio is 1%.
Since Jan. 1, 2024, Ukrainian companies have been able to purchase land through Prozorro. Sales, the state e-auction system for property sale and lease.
In December 2024, a cyberattack caused a shutdown of Ukraine’s state registers, halting registrations and transactions. As a result, the pace of land market development had slowed by 3% quarter-on-quarter, Neyter said.
The final stage of land reform in Ukraine should be the opening of the market to individuals and legal entities from EU member states, which would harmonize Ukraine’s land legislation with corresponding EU laws, Ukrainian media reports.
However, this process, including negotiations with the EU, will take a long time, and it is unlikely to be completed while Russia’s war continues on Ukrainian territory.
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