In Ukraine, the rise in construction costs has accelerated significantly. According to the State Statistics Service of Ukraine (the State Statistics Service), in August 2026, construction prices increased by 25.4% compared with the same month last year. The construction of non-residential buildings and engineering structures became the most expensive.
This situation creates additional risks for developers, investors, and the implementation of state reconstruction projects. Rising construction costs may affect apartment prices in newly built developments, as well as the cost of repairs and the reconstruction of housing damaged by Russian attacks.
Why construction work is becoming more expensive faster than overall inflation, how real estate prices are changing, and whether Ukrainians will have to pay more for square meters was examined by UNN.
How construction prices have changed in Ukraine
According to data from the State Statistics Service published on October 12, the construction price index in August 2026 was 101.7% compared with July. This means that the cost of construction work increased by 1.7% in just one month. The increase was even more significant year on year. Compared with August 2025, construction became 25.4% more expensive. For comparison, the annual increase was 23.7% in July and 23.1% in June.
As we can see, prices in the sector are rising at an accelerating rate. Moreover, this is a general trend covering residential, non-residential, and engineering construction.
Which construction segments became the most expensive
Price increases were recorded in all major areas of construction. Over the year, the cost of work on the construction of non-residential buildings rose the most—by 26.4%. In engineering construction, prices increased by 26.1%, while in residential construction they rose by 21.5%. Over the month, prices for the construction of non-residential facilities increased by 2%, engineering structures by 1.6%, and residential buildings by 1.3%.
Among individual types of facilities, transport infrastructure construction became the most expensive in August, rising by 2.1%. The cost of work on the construction of pipelines, electronic communications network lines, and power transmission lines increased by 1.8%.
At the end of January–August 2026, prices for construction and installation work were generally 18% higher than during the corresponding period last year. In the residential segment, the increase was 15.5%; in the non-residential segment, 18.7%; and in the engineering segment, 18.4%.
For comparison, construction prices rose by 5.8% over the whole of 2025 and by 7.9% in 2024, which, according to the vast majority of analysts in the sector, indicates increased price pressure on an industry that simultaneously provides new construction, repairs, and the reconstruction of damaged infrastructure.
Why construction work is becoming more expensive
Construction price growth is significantly outpacing consumer inflation. In August 2026, annual inflation was 8.1%, while construction work became 25.4% more expensive.
Several factors may currently affect the cost of construction projects at the same time:
- Construction materials. Changes in the cost of metal, cement, concrete, thermal insulation materials, and other resources affect the overall construction budget.
- Energy. Electricity and fuel are necessary for the production of materials, the operation of construction machinery, and the transportation of cargo.
- Logistics. War-related risks, damage to transport infrastructure, and more complicated supply routes may increase transportation costs.
- Labor costs. Higher wages and competition for skilled workers increase the expenses of contracting organizations.
At the same time, the State Statistics Service did not specify exactly what share of the August price increase was attributable to each of these factors.
The situation in the labor market deserves special attention. According to OLX Jobs, the median salary offered by employers in vacancies in the "Construction and tiling work" category amounted to UAH 38,125 in July 2026. This was approximately 22% more than a year earlier.
For construction companies, the increase in all these costs — for personnel, materials, and the execution of works — entails the need to revise estimates. Such an upward revision may be particularly significant for long-term projects whose budgets were based on previous prices.
Why prices are rising while the volume of work is declining
Despite the substantial increase in costs, the construction sector has not demonstrated a corresponding increase in production volumes. According to the State Statistics Service, in January–August 2026, the output of construction products decreased by 9.9% compared with the same period last year. The value of construction products produced during this period amounted to UAH 156.5 billion.
The largest decline occurred in the construction of engineering structures — 13.7%. Residential construction decreased by 3.8%, while non-residential construction fell by 6.3%. In August, construction volumes were 3.7% lower than in August 2025. At the same time, compared with July, they increased by 12.9%.
Moreover, the situation differed across individual segments. Year on year, August residential construction volumes decreased by 2.3%, while engineering construction fell by 12.2%. By contrast, non-residential construction demonstrated growth of 9.8%.
Will apartments become more expensive for Ukrainians?
The rising cost of construction work creates the preconditions for further increases in housing prices on the primary market. However, the relationship between construction costs and the sale price of an apartment is not direct. A developer may partially pass the additional costs on to buyers, reduce its own profitability, or revise the project’s implementation timeline. But the extent to which the price per square meter will rise will depend on demand, competition, and the financial condition of the particular company.
The situation in Kyiv’s new-build market is illustrative here. According to LUN statistics, as of October 13, 2026, the median starting price per square meter in economy-class new-builds was about UAH 40,500. Over the year, it increased by just 2%. In the comfort class, a square meter cost approximately UAH 56,300, 17% more than a year earlier. In the business class, the median price was UAH 83,300, demonstrating annual growth of 12%. Thus, even within a single city, different real estate segments demonstrate different trends.
Another example is Dnipro, where, according to LUN data as of early October, the median starting price per square meter in economy-class new-builds decreased by 5% over the year, while in the comfort class it increased by 15%.
Therefore, a 25.4% increase in the cost of construction work does not automatically mean that buyers already have to pay a quarter more for apartments. However, persistently high construction costs may create additional pressure on prices in new projects. It is worth noting that the impact on the secondary market will be even less direct, as apartment prices there are largely determined by demand, the condition of the housing, and its location.
How rising construction costs will affect Ukraine’s reconstruction
Rising prices in the construction industry matter both to commercial developers and to state and local authorities implementing recovery projects. These include the reconstruction of damaged residential buildings, schools, hospitals, roads, bridges, heating and water-supply systems, and energy infrastructure.
If a project budget was prepared earlier but the actual costs of carrying out the work have increased, the estimate may need to be revised. With limited funding, this creates a risk of delays or the need to change the sequence in which the work is carried out. For example, if a community planned to restore several facilities within a specified budget, rising construction costs may reduce the number of works that can be financed within the initial budget.
The need to ensure transparency in spending remains an additional challenge. Amid significant price fluctuations, reviewing estimates, substantiating the cost of materials, and monitoring the use of budget funds become particularly important.
Construction has become more expensive in Ukraine: how this will affect people rebuilding their own homes
The rising cost of construction work may also affect households that are repairing damaged apartments or rebuilding private houses. In such cases, additional expenses arise due to changes in the prices of materials, equipment, delivery, and construction workers’ labor.
This issue is particularly sensitive for homeowners who use the state єВідновлення compensation program. According to the program’s official portal, compensation for damaged housing may amount to up to UAH 200,000 for minor repairs, up to UAH 350,000 for major repairs to an apartment, and up to UAH 500,000 for major repairs to a private house. The specific amount is determined according to an established procedure, depending on the nature of the damage. If the actual cost of the necessary work exceeds the approved compensation amount, owners may face the need to seek additional financing.
Therefore, when planning housing restoration, it is important to rely on up-to-date cost estimates and the actual cost of the specific work.
What to Expect from the Construction Market in the Near Future
Experts are currently unanimous: future price dynamics in the construction sector will depend primarily on the cost of materials and energy resources, the availability of qualified workers, logistics, the security situation, and financing opportunities. If contractors’ costs continue to rise, this will sustain pressure on the budgets of new projects and may gradually be reflected in housing prices. However, it is also worth remembering that limited demand does not always allow developers to pass additional costs on to buyers in full. Under such conditions, companies may restrain price increases, offer installment plans, or postpone the launch of new projects.
For state-led reconstruction, the key issue will remain the balance between the amount of available financing and the actual cost of the work. Currently, Ukraine’s construction industry is in a difficult situation: the cost of carrying out work is rising, while overall construction volumes are declining. For the economy, this creates an additional burden on investment and reconstruction projects. For Ukrainians, it poses the risk of a gradual increase in the costs of purchasing new housing and carrying out renovations.
Let us remind you
Earlier, UNN wrote about how the war changed the construction map in Ukraine.