Mortgage Loan Issuance in Ukraine Soars by 400% in the Last Year

The year 2023 saw a significant surge in the issuance of mortgage loans by Ukrainian banks, as they disbursed a total of 6,114 mortgages amounting to ₴9.1 billion. Such numbers indicate an almost fivefold increase from the previous year’s volume of consumer mortgage loans, as highlighted by a survey conducted by the National Bank. The number of mortgage transactions also saw a threefold rise. For the month of December alone, data from eight banks providing housing purchase loans attests to the continuation of this upward trend. The bulk of these mortgages were allocated for properties in the secondary real estate market. Despite the remarkable increment in issuance, the weighted average effective rate on mortgage loans held steady at 7.6% in December, mirroring November rates and reflecting a decrease from December 2022’s rate of 8.3%. The capital city Kyiv, alongside its surrounding region, led the mortgage market, with 2,664 contracts amounting to ₴4.5 billion, representing half of the entire volume recorded in 2023. Other regions following suit include Lviv, Rivne, and Vinnytsia with notable contract numbers and amounts. A key force behind the burgeoning mortgage market is the state-backed eOselya program, says the NBU.

FAQs about Mortgage Loans Increase in Ukraine

• What caused the surge in the number of mortgage loans in Ukraine?
  The increase has been attributed to various factors, including the presence of government incentives like the eOselya program that encourages mortgage lending.
• Which region in Ukraine experienced the highest number of mortgage loan contracts?
  Kyiv and the Kyiv region recorded the highest number, with 2,664 contracts contributing to half of the total volume.
• Has the interest rate for mortgage loans increased with the higher issuance?
  No, the weighted average effective rate has remained relatively steady at 7.6%, indicating stability despite the uptick in loan issuance.
• Are new mortgages being given for both, new and secondary real estate markets?
  Most of the mortgage loans were made for the secondary real estate market.
• Is it easier to get a mortgage loan in Ukraine now compared to previous years?
  Government programs like eOselya are making it more accessible for consumers to obtain mortgage loans.

Conclusion

The mortgage industry in Ukraine was characterized by significant growth in 2023, as the number of loans provided soared dramatically. The government’s eOselya program, among other factors, played a pivotal role in propelling this expansion, offering Ukrainians more favorable conditions to purchase homes and galvanizing the market, particularly in the secondary real estate sector. While this trend reflects a robust growth trajectory for the mortgage loan sector in Ukraine, the stable interest rates suggest a balanced progression that may continue to foster homeownership in the coming years.