Profitable and risk-free: Ukrainian land is becoming an increasingly attractive investment asset
10 July 12:34
ANALYSIS 
Over the five years that the agricultural land market has been operating in Ukraine, the weighted average purchase and sale price of land plots has more than doubled. This price increase exceeds Ukraine’s inflation rate, making land an increasingly attractive investment asset. To find out more about the Ukrainian land market,
July 1 marked the fifth anniversary of the opening of Ukraine’s agricultural land market in 2021. During this period, more than 512,800 land sale and purchase agreements were concluded, covering a total area of 1,154,000 hectares and with a combined value of 51.4 billion hryvnia.
Thus, it can be concluded that the land market in Ukraine has established itself as a fully-fledged economic institution. This is one of the main conclusions contained in an analytical report prepared by the Center for Food and Land Use Research at the Kyiv School of Economics (KSE Agrocenter).
Source
“The market has developed; it has become liquid. That’s one side of the story. On the other hand, what opponents of land reform once predicted—that everything would be sold off, agricultural holdings would move in, and they would buy everything up—has not happened. That’s not the case. There is sufficient demand in the market. Rising prices are proof of that. However, the supply of high-quality land is more limited. We don’t have very many good options on the market—specifically, consolidated land parcels. That is, a half-field or a full field with access to a road. There aren’t very many such offers. It’s easier with leases. You can simply lease the land, then negotiate with the co-owners and start farming it. As a result, demand is slightly higher than supply. And this, accordingly, is reflected in the cost of land,” the expert notes.
Market Leadership
According to the study, the weighted average nominal price in land sale transactions increased from about 30,000 UAH/ha at the start of the market to 65,800 UAH/ha as of mid-2026.
The most expensive land is currently in Ivano-Frankivsk Oblast—139,000 UAH/ha—followed by Lviv Oblast at 123,400 UAH/ha and Kyiv Oblast at 107,100 UAH/ha.
At the same time, in terms of the total area of land plots for which purchase and sale agreements were concluded during the five years the land market has been operating, the leaders are Poltava (107.6 thousand hectares), Dnipropetrovsk (94.8 thousand hectares), and Kharkiv (89.4 thousand hectares).
Collectively, these three regions account for nearly one-third of all agricultural land sold. In other words, the regions leading in the number of transactions are not the same as those leading in transaction value. Pavlo Martyshev explains.
“Land in the western regions is a bit overvalued. The western regions aren’t bad in terms of agricultural production, but they aren’t the best. In other words, the central part of Ukraine is still more optimal in terms of two factors. First is logistics—it’s easier to reach the ports. Consequently, grain prices are better there because it costs less to transport it to the ports. And second is the climate. There is rainfall and humidity, which means the soil is of relatively higher quality. And there’s sunlight. Thus, land in the central regions is in the highest demand,” the expert notes.
Gradual Market Development
A surge in demand on the land market was expected starting January 1, 2024, when legal entities—whose ultimate beneficiaries are Ukrainian citizens—gained access to the market, with the right to purchase up to 10,000 hectares.
Prior to this, as is well known, only individual citizens of Ukraine had this opportunity, and even then with a limit of 100 hectares per person. However, as the authors of an analytical report from the Center for Food and Land Use Research at the Kyiv School of Economics note, despite the fears of farmers and landowners, expanding access did not lead to an abnormal surge in demand—the number of transactions and the area of land sold grew gradually.
But they did grow. And that’s important. Pavlo Martyshev, deputy head of the KSE Agrocenter and co-author of the study, continues.
“The land market received two impulses for development. First, it was the opening of the market to individuals, since they were starting from a very low base. And prices rose. Then a full-scale war began, and the market quieted down. And here’s the second impetus—the opening of the market to legal entities. It’s important to understand that land is now an increasingly scarce resource compared to other resources available to farmers. For example, farmers have many grain elevators and a lot of equipment. In other words, there is no shortage of those. What they often lack, however, is land. And there is demand for land. If contiguous land parcels were offered, demand would be significantly higher,” says the expert.
With the opening of the land market to legal entities, many expected land ownership to become concentrated in the hands of large holding companies. However, as Pavlo Martyshev notes, this has not happened:
“We’re not seeing significant tracts of land accumulating in a single owner’s hands; there’s no such concentration. We don’t see local monopolies. Perhaps at the level of a particular village, but that’s not some large holding company—it could just be an ordinary farmer. The market is very diverse—that is, there are a great many enterprises in the market—and there’s no one who has bought up a lot of land.”
The expert also sees nothing alarming in the potential entry of foreigners into this market.
“Opening the land market to foreign investors is certainly a step toward European integration. The question is, however, what the specific terms of this opening will be. But if everything is properly regulated, and the rules are the same for everyone, it will be a positive development for the market, as it fosters healthy competition and benefits landowners because land prices will rise,” emphasizes Pavlo Martyshev.
An Asset for Investment
The very emergence of foreign buyers in the Ukrainian land market could serve as another catalyst for the market’s development. And this prospect alone should enhance the investment appeal of land assets.
At the very least, there is a prevailing view that the exclusion of foreigners from the Ukrainian land market is one of the main reasons why prices have remained at the current level of $1,500 and have not risen much higher.
However, according to Pavlo Martyshev, Ukrainian land is already a sufficiently attractive asset for investment.
“The real value of land, adjusted for inflation, is rising. In other words, it’s becoming a decent alternative to purchasing real estate. This is especially true during wartime. Moreover, land prices have room to grow. No one knows how high they will go, and this is determined by many factors. For example, the potential for increased yields of major crops. We also still have some potential for productivity growth. This also depends on global cycles in commodity markets. In other words, during periods of high prices, land values typically rise as well, because farmers compete more actively for that land,” the expert notes.
In short, this asset is potentially profitable and carries minimal risk. In simplified terms, the land investment process looks like this: purchase land, lease it out and collect rent, then sell the land once its value has appreciated. There are already plenty of people in Ukraine willing to support such investments.
There are also plenty of arguments for why it’s worth investing in land. One of them is that land is a limited and stable resource that only increases in value over time. And the five years of the land market’s operation in Ukraine have confirmed this growth—albeit more modest than one might have hoped.
