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Mortgage Lending Gradually Recovering Due to Government Programs, Survey Shows

Mortgage Lending Gradually Recovering Due to Government Programs, Survey Shows

In 2022, the banks issued 2,009 mortgages to the total amount of UAH 1.96 billion. Last year, new mortgages fell by 81% yoy by number of agreements and by 77% yoy in terms of value.

This is evidenced by the monthly mortgage lending survey.

In 2022, most mortgages – two-thirds by number of agreements – were issued in January–February, before russia launched the full-scale war against Ukraine.

The banks issued no mortgages at all in March–May, with only a few being granted in summer.

However, as of September, mortgages started to gradually recover, mainly due to Affordable Mortgage and eOselia, state programs that support mortgage lending. Under these programs, homebuyers can take out mortgages at reduced interest rates of 7% and 3% per annum, respectively.

The banks issued 252 mortgages worth a total of almost UAH 280 million in September–November 2022, and 405 mortgages totaling UAH 500 million in December. This is the highest monthly indicator since the onset of the full-scale war. Four banks reported issuing new mortgages in December.

During the war, the banks have primarily been issuing mortgages to homebuyers in the secondary real estate market: mortgage agreements in this sector accounted for 99% of all new mortgages issued in June–December 2022.

By region, most mortgages for said period – 241 agreements for a total of almost UAH 345 million (43% of the total amount) – were issued in Kyiv and Kyiv oblast, 48 agreements for UAH 60 million (8%) in Volyn oblast, 37 agreements for UAH 50 million (6%) in Vinnytsia oblast, and 54 agreements for UAH 47 million (6%) in Chernihiv oblast. 

For reference

The monthly surveys of the banks represent their own assessments of their mortgage portfolios. Therefore, the results may differ from the official data published in the Statistics section of the NBU’s official website.

Such differences are primarily driven by the banks’ use of management reporting data to compile their mortgage portfolio data sheets. This approach better reflects the type of collateral for loans and thus the loan categorization criteria.

The banks can update their reports for previous months, meaning that retrospective changes in future periods are possible.

 

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