The ratio of mortgage loans to GDP in Ukraine is at most 1%: What is happening in this market?

The National Bank reported that the ratio of mortgage loans to GDP in Ukraine is 1%, the lowest indicator in Europe. Obstacles to mortgage growth are the uncertain prospects in the real estate market and the high risk in mortgage lending, which are reflected in high rates. However, preferential lending through the state program eOselya became an alternative during martial law, changing this market segment.

In particular:

1. Loans are now offered at 3% or 7%, compared to average mortgage rates of 14% before the full-scale war due to the affordable eOselya loan program, launched in October 2022.
2. Cheaper mortgages and higher housing prices encourage people to take out loans for increasingly larger amounts with smaller contributions.
3. The average loan term at the end of 2021 was about 15 years. Now, mortgages are taken for a longer term.
4. Previously, borrowers were mostly people aged 35-45 with stable incomes; now, more borrowers younger than 30 have appeared.

Since the beginning of the eOselya Affordable Loan program (October 2022), 11,887 families have received loans totaling over ₴18.9B.