High risks persist in the primary housing market, associated both with the developer’s financial ability to complete the construction of initiated projects on time and with purely "wartime" circumstances.
Meanwhile, "credit risks" entirely fall on the bank and the buyer of primary market housing.
Olena Dmitriieva, First Deputy Chairperson of the Board of GLOBUS BANK, spoke about this.
She emphasized that currently, over 60% of all loans to the population are "short-term" consumer loans ranging from UAH 5,000 to UAH 100,000 with a repayment period of up to 12 months. In contrast, mortgage loans are usually issued for more substantial amounts: most often from UAH 1 million to UAH 4 million and for a period of 3 to 20 years. Thus, the expert concludes, mortgages for banks have a significantly higher average check and are longer in duration, which is why the number of mortgage loans issued by banks is small compared to consumer loans, amounting to about 1,000 agreements per month.
"As of June 2024, only 9 banks are developing mortgages, and 8 banking institutions are participating in the 'yeOselya' program. It should be noted that each of them has its own development strategy, respective financial capabilities, and specific requirements for both the borrower and the developer (if the bank operates in the primary market). Issuing a mortgage loan in the primary market necessitates forming bank reserves ranging from 7% to 50% of the mortgage amount. That is, by providing a loan, the bank immediately incurs substantial reserve expenses. Therefore, developing mortgages in wartime conditions is quite risky and costly for banks," emphasized Olena Dmitriieva.
