As fighting ramps up in Ukraine, especially around the capital city of Kyiv, a new fight off the battlefield has emerged among Ukrainian realtors: unethical housing practices.
“Unfortunately, housing prices are increasing disproportionately and have approximately tripled,” Association of Real Estate Professionals of Ukraine Vice President of Regional Development Natalia Mytsuta said in a video.
FEEDING TROOPS, FIGHTING UNETHICAL HOUSING
Mytsuta, along with being a realtor, leads a large volunteer operation funded by Ukraine Trustchain, according to Daniil Cherkasskiy, who founded the organization.
Ukraine Trustchain is a network of people that fund aid and evacuations in the Ukrainian war zone.
“She is feeding close to 3,000 people daily in Kyiv, Irpen’ and Chernihiv,” Cherkasskiy said in a LinkedIn post.
Mytsuta’s team delivers food and medicine to the elderly and people in need to cities under siege all while making sure those who leave can find somewhere to rest their heads.
“She took time out of her 20-hour days to attend a regional ethics meeting amid Russian bombardment to hold bad actors accountable,” Cherkasskiy said. “I can’t think of a better example of realtors standing for their clients and justice.”
‘NO ONE CASE WILL GO UNPUNISHED’
“There is this group of people that calls themselves realtors, who don’t work with homeowners,” Mytsuta said. “[They] don’t communicate clearly that during the war nobody should be raising prices, even less so tripling them.”
Mytsuta added homeowners are unfairly raising rent pricing adding additional strain to people already suffering.
“People are coming out of the war zone, and do not have the means for even two months of sustenance,” Mytsuta said. “They face the prospect of losing their means to existence. Nobody acts like this during a war.”
For Mytsuta, the best way to keep other realtors honest, was realtors.
“We, the realtor community, have influence on housing prices. Pricing is worked on by professionals,” she said.
To combat those taking advantage of Ukrainians fleeing death and destruction, Mytsuta is looking to deflate inflated pocketbooks by accessing public records to find price-gouging homeowners.
“We created a committee that tracks all realtors that impose 100% commission rates in the western regions. If they think they posted an ad somewhere and then it will disappear, that is not how this will work,” Mystuta said. “Based on the information passed to our committee we will make sure that all homeowners will pay excessive fines for the failure to pay taxes for their rental income. No one case will go unpunished.”
The fines Mytsuta threatened start at 50,000 HRY (~$1,700), they can even reach 85,000 HRY ($2,900). Homeowners may face these even if they rented for a short time.
“It doesn’t matter if they rent their properties for a day, a week, or multiple years because there are people that make their properties available at no cost or provide large discounts, while others try to profit,” Mytsuta said.
On U.S. soil, there were growing fears the price-gouging in Ukraine would be mirrored at home.
RUSSIAN-UKRAINIAN CONFLICT EFFECT ON U.S. HOUSING MARKET
When the conflict began, there were concerns the housing market could suffer in the United States with a drop in international real estate transactions, but new research from the National Association of Realtors hints that may not be the case.
There has been some volatility as mortgage rates dropped in early March amid the invasion of Ukraine. Toward the end of the first week of March, 30-year fixed-rate mortgages averaged 3.76%, with an average 0.8 point.
Two weeks later 30-year fixed-rate mortgages were back up and averaged 4.16 percent, with an average 0.8 point. That rise, however, is more than likely a direct reaction to the federal tax rate hike to combat 40-year high inflation.
The increased rate combined with global conflict signals the general cost of housing could continue to increase according to NAR researcher Scholastica Cororaton.
“Should oil prices be sustained above the $100/barrel level, the deeper effects of higher inflation, bigger future interest rate adjustments, weaker global currencies relative to the U.S., and slower global growth creates significant downside risks to the housing market,” Cororaton wrote.
Cororaton added “inflation and supply chain problems likely will prompt even higher construction costs” as construction materials have climbed 22% annually and lumber is up 40% over the past 13 months.
RUSSIANS UNLOAD U.S. HOMES
When the conflict began, multiple countries imposed sanctions on Russia and its oligarchs to try and tame the invasion. It’s a move that appears to have those oligarchs selling off their U.S. property, according to The New York Post.
An owner of Russia’s largest private bank hit by sanctions, Billionaire Alexei Kuzmichev — an owner of Alfa-Bank, listed his $41 million quadruplex in Manhattan.
The Post also reports Valery Kogan, the owner of Moscow’s Domodedevo Airport, and his wife are looking to offload their $50 million, two-unit combo at the Plaza Hotel as well as three other properties. All four total around $250 million.
Sunny Isles Beach, Fla., which is known as “Little Moscow,” has seen active listing grow by nearly 10% since Russia invaded Ukraine.
“They are afraid of getting their assets seized,” Erin Sykes, a broker and international chief economist at Nest Seekers International, told The Post. “Even if it is just guilt by association.”
On Monday, March 21, the Organized Crime and Corruption Reporting Project released the Russian Asset Tracker to track assets of prominent oligarchs tied to Vladimir Putin.
BATTLE ISN’T OVER
Like the OCCRP, the AREPU is not giving up their efforts, adding career death among the fines to Ukrainian “bad actors.”
“You will see that all realtors participating in such abomination will be thrown out of the profession and will pay fines,” Mytusta said near the end of her video message.
She ended her video with a battle cry that, here, is both applicable in the war zone and the fight for fair housing.