Ukrainians began to take out mortgages less often: banks reduced the issuance of loans by 16%

The mortgage market is shrinking for the second month in a row

A decrease in activity on the mortgage market has been observed for several months. Banks were issued in April 910 new mortgage loans for UAH 1.7 billion. In May, the indicator decreased to 776 contracts, and in June - to 763.

Thus, in two months, the number of new mortgage contracts decreased by approx 16% compared to the April level.

At the same time, new loans in June were actually concentrated in a limited circle of banks — they were issued only 13 institutions out of 38 who took part in the survey.

What kind of housing do Ukrainians take loans for?

The largest number of mortgage loans in June fell on primary real estate market. Banks concluded 399 such contracts for the total amount UAH 770 million.

Of this amount, 167 loans for UAH 297 million were directed to the purchase of housing that is still under construction. In such cases, property rights to future real estate acted as security.

On secondary market in June, Ukrainians issued 364 mortgage loans for UAH 698 million.

That is, the demand for new housing remains somewhat higher, but the overall activity on the market is decreasing.

Kyiv region remains the leader in the volume of mortgages

The largest number of mortgage loans in June was issued in the Kyiv region. It fell on the region 268 contracts worth UAH 521 million.

In Kyiv itself, banks issued another 102 loans for UAH 229 million.

Among other regions, the highest indicators were demonstrated by:

• - Lviv region — 51 loans for UAH 107 million;

• - Odesa region — 38 loans for UAH 61 million;

• - Vinnytsia region — 32 loans for UAH 64 million.

Thus, a significant part of mortgage lending continues to be concentrated around Kyiv and the largest economically active regions.

How much is a mortgage?

In June, the weighted average effective interest rate was lower for loans in the primary market.

For housing in new buildings, it was 7.74% per annum, while for real estate on the secondary market — 9.86% per annum.

At the same time, the share of non-performing loans in the general mortgage portfolio of banks remained at the same level 12%. This means that banks continue to take into account sufficiently high risks when lending to the population.

Why the demand for mortgages is decreasing

Reduction in the number of new loans occurs even though state programs of preferential mortgage lending remain the main driver of the market.

Demand is influenced by several factors at once: the high cost of housing, the need to accumulate a significant down payment, war risks and the uneven economic situation in different regions.

Credit risks remain an additional factor for banks. Because of this, they are not ready to equally actively build mortgage portfolios, even when government support programs stimulate demand.

What is happening with "eOsele"

One of the key instruments of market support remains the state program "eOselya". The standard down payment for it is from 20% of the housing cost.

For borrowers under the age of 25, the contribution can be reduced to 10%. However, even under favorable conditions, accumulating the necessary amount remains a serious barrier for many potential buyers.

Therefore, the June statistics do not indicate the disappearance of mortgage demand, but its gradual cooling. Ukrainians continue to buy housing on credit, but the number of new contracts is decreasing, and the main activity is concentrated in the Kyiv region and large cities.