The volume of mortgage lending in Ukraine fell by 25% compared to the second half of 2024. The main reason was the restrictions in the ‘eOselya’ program and the lack of funding for issuing new loans.
This is reported by Finway
Reasons for the Reduction in the Mortgage Market
In fact, almost all mortgage loans in Ukraine are provided under the state program ‘eOselya’, so any changes in its conditions have a direct impact on the market situation. In particular, in 2024, a restriction was introduced whereby funding is only provided for the purchase of new housing. This significantly narrowed the list of available properties for purchase. Additionally, the institution ‘Ukrfinzhytlo’ faced a shortage of funds, which did not allow for the issuance of a greater number of mortgage loans.
“The issuance of mortgage loans in Ukraine decreased by 25% compared to the figures from the second half of 2024 due to the restrictions of the ‘eOselya’ program and a lack of funds, the NBU reported.”
Current Market Situation and Regulator Proposals
Currently, the share of mortgage transactions accounts for only 2-3% of the total number of housing purchase operations, which is significantly lower than the figures from 2021. An exception is observed only in the Kyiv region, where the level of mortgage transactions reaches 10%.
To stimulate the development of the mortgage market, the National Bank is proposing a set of measures. Among the main directions are the implementation of European property valuation standards, the creation of an open database of real estate prices, ensuring the availability of mortgage insurance against military risks, and changing approaches to state support. It is anticipated that instead of direct funding, banks will receive compensation for part of the interest rates paid by borrowers.