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20 August 2017
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Experts: the land is overpriced

government is planning...

The government is planning to increase the normative appraisal of the value of land before lifting the moratorium on its sale, owners of land plots will not turn a profit from this policy, according to KyivWeekly. The Cabinet has said it will issue a resolution according to which the normative appraisal of the value of Ukrainian land in money terms will be increased 1.7 times so that the average price of a hectare will increase from UAH 12,000 to 20,000 and in the regions where there is black soil the price of land may grow even more.

Vice Chairman of State Land Agency of Ukraine (SLAU) Mykola Kalyuzhniy told the press last week that such a sharp rise in the prices will ensure that Ukrainian land owners will not get ripped off and their financial standing will be improved by holding onto their arable land.

In the meantime industry representatives and experts show skepticism abot the effectiveness of the policy. “The mistake that the authors of the bill made in overpricing the land is that today the driving force behind the increasing of leasing rates is the market rather than the government with its decrees and resolutions. Growing competition led to a multi-fold increase of the leasing value of land plots over the past few years,” Director of ProAgro Mykola Vernytskiy told E-Media.

“It was the competition that boosted the leasing rate for a hectare of land up to UAH 550 in the Kyiv Oblast, and to UAH 750 in central Ukraine. Today, agro companies are fighting tooth and claw for share owners. Any administrative intervention will only reduce competition. Moreover, the increased norms will squeeze small producers out of the market which hardly will increase competition or the earnings of land owners,” said Director of the AAA Consulting Company Serhiy Nalyvka.

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