Mortgage lending in Ukraine still has a minimal impact on the housing market, and its share remains low. According to recent estimates by the National Bank, less than 3% of residential properties in the country are purchased using a mortgage.
This is reported by Business • Media
Regional Differences and the Role of New Constructions
The highest share of mortgage transactions is observed in the Kyiv region, where nearly 9% of housing purchases are made with borrowed funds. At the same time, in the central, southern, and eastern regions of the country, new mortgage loans are hardly issued. A separate segment is highlighted for new constructions less than three years old: here, one in five apartments is purchased with a mortgage, which is linked to the concentration of the state program “eOselya”.
However, in residential complexes that are under construction, the level of mortgage lending remains low. About 44% of transactions involve completed housing offered by developers. Although nearly 300 new constructions have received accreditation to participate in the “eOselya” program, most of them have yet to record any apartment sales on credit.
Forecasts and Necessary Changes for Mortgage Development
The National Bank of Ukraine predicts that changes in state support mechanisms could stimulate mortgage lending. At the same time, for the full development of this market segment, additional measures need to be taken, including the implementation of Directive 2014/17/EU on mortgage credit, the introduction of European property valuation standards, and increasing the transparency of real estate price data and control over construction financing.
The regulator expects a revival in mortgage lending following the update of state support mechanisms and simultaneously emphasizes the need for other steps, including the implementation of Directive 2014/17/EU on mortgage credit, the introduction of European property valuation standards, and increasing the transparency of real estate price data and controllability of construction financing.