Inspired by a long-awaited drop in real estate prices, the Kyiv Post decided to go on a quest to find the cheapest apartment in Kyiv this month. The price of $35,000 for a single-room flat sounded like nonsense last autumn, but it does not surprise real estate agents any longer.

Not only has the market yet to hit bottom, discounts are coming fast and hard.

Prices quoted in a print copy of Aviso, the major real estate and classifieds weekly in Kyiv, become outdated quickly. The most current prices can be found on one of Kyiv’s many real estate websites, like, www.realt.ua. The same properties there can be thousands of dollars cheaper than in Aviso.

There are a few flats listed for $35,000, but some of them have serious drawbacks: One had no kitchen; another had a communal kitchen shared by several families.

Hoping to bargain the listed price down, the Kyiv Post picked out several options for viewing.

The first one was a 22-square-meter place for $35,000 on 11A Shepeleva Street in Solomyanskiy district. The second one was an even smaller, but slightly better located, 20-square-meter flat on 4 Pryladniy lane in Svyatoshinskiy district. The asking price was $38,000. The third choice sounded like the best option available: 30 square meters for $37,000 on 3 Holosiyivska Street in Holosiyivskiy district.

The first option has its advantages, the real estate agent said. “This house was built for Metrobud [municipal metro construction company] workers. That’s why it’s got very good heating,” the Blahovest real estate agent said, pointing to a nine-storied brick building. It’s a 10-minute minibus ride from Shulyavska metro station, and then a five-minute walk.  The walk is pleasant and takes you through a park where you can spot squirrels climbing trees.

The entrance is a typical metal door with a digital combination lock on it. A strong smell of cigarettes hits the nose as you enter the building, and walls are covered in graffiti of anarchy signs.

The flat looks neat and tidy. Nothing special, but liveable. It seems incredible, but apparently five square meters of kitchen space can fit a table, a sink, a stove, a cupboard and a fridge.

Having heard that my budget is limited to $30,000, the real estate agent says I would still have to find an extra $5,000 to cover her 5 percent brokerage fee and 2 percent payment of real estate and pension fund duty. Those add-ons are not included in the price – a nasty surprise for those who truly are looking to buy on a tight budget.

The next flat is even easier to get to. It is a three-minute ride by minibus from Akademmistechko metro station. The flat on 4 Pryladniy lane is a former dormitory, so one should not expect much. The entrance hall surprises with newly-painted walls and eight baby carriages standing neatly in a row. The impression is quickly spoiled by the corridors and stairwells shedding plaster, as if a bomb was recently dropped here.

The real estate agent recommends the apartment because the owners creatively redesigned it themselves. The room is green, with green curtains and a multi-level ceiling with nice lighting. The bathroom is done in red. There is no bath in it, just a shower. The small kitchen is fully outfitted, and the hall is bright yellow. It even has an Internet connection.

“It is completely enough for me and my husband, but we are expecting a baby and need a bigger flat,” the young owner explains, looking over her stylish and cozy flat. Finally, she drops the price to $35,500, but there is still an additional $2,500 that has to be paid to the broker.

The third flat sounds most promising: 30 square meters in total, with 19 meters of living space, a four-square meter kitchen in good condition, and just a 15-minute walk from Lybidska metro station. But this treasure was snapped right out of my hands. Disappointingly, the previous viewer left a down payment for this $37,000 property, and agreed to pay all additional expenses.

Apparently the cheapest flats are in great demand now, according to Mykhaylo Polyntsev, analyst at Planeta Obolon real estate agency. “But such options are very few. It is not easy to find apartments for this price. More realistic prices start from $45,000. You pay this for a more-or-less normal apartment. A flat with a good floor-plan in a new building around Poznyaky or Osokorky costs $50,000.”

Serhiy Kostetskiy, a realty specialist from SV Development real estate agency, said their database shows that, between October and December 2008, housing prices dropped by 33 percent in the secondary market, and 48 percent on the primary market [for new flats].

“A flat that used to cost $100,000 in September, nobody can sell for $40,000 now. House owners give 50 percents discounts and more,” he said. Prices on the secondary market continued to decline by about 2 percent per week this year, while the primary market has seen no deals at all.

Unable to sell, property owners have turned to other options such as renting. But the influx of new properties and other market factors have affected rent prices too.

In September, it was almost impossible to find a one-room flat for less than $550 per month. But now offerings for $200-$250 are common, Kostetskiy said, and nobody is in a hurry to grab them.

He also said only about 10 percent of property owners need money immediately and choose to sell now. The rest are waiting. “Most of them are profiteers. To sit out the crisis, they make basic upgrades and turn to the rental market. At the beginning of 2008, there were three flats per each request. Today, there are 20 flats per each person interested. That’s why prices are constantly going down.”

Most market players agree that making forecasts for the real estate market this year is equivalent to making wild guesses. Much depends on the actions of the government and the banks.

“If the state passes a good anti-crisis package of laws, protecting borrowers …and giving financial support to banks, prices will not drop by more than 30 to 40 percent,” Kostetskiy said. “But in the worst-case scenario, if nothing is done for the housing market, the further decrease in 2009 will be 50 percent.” He said prices would not rise any time soon.

So, if you’re lucky enough to have some savings in dollars, real estate agents say the best time to buy would be in the summer or autumn of 2009, when the bottom of the market is expected to be reached.