Expert opinion

The substantial expansion of the YeOsel state mortgage program to the primary market stimulates banks to actively develop their own mortgage programs.&nbsp This was told by Olena Dmitrieva, the first deputy chairman of the board of GLOBUS BANK. Referring to the data of the Ukrainian Financial Housing Company ("Ukrfinzhitlo"), she noted that at the beginning of March, the number of developers accredited to participate in the state mortgage had already reached 27 companies out of 13 oblasts (64 objects, taking into account both individual housing complexes and individual sections-houses within the housing complex).

According to Olena Dmitrieva, in the second quarter we can expect a gradual increase in the number of developers accredited under the YeOsel program, as well as there are enough reasons for the active development of partnership agreements between developers and commercial banks as another effective tool for the development of mortgages in the primary housing market.
In her opinion, in the next 2-3 months, the involvement of developers in the YeOsel program may become more noticeable. First, development companies have clearly realized the need to improve their own sales mechanisms, as required by the conditions of participation in the state mortgage program, such as the use of construction financing funds, the mechanism for the purchase and sale of property rights, and the implementation of targeted bonds. Secondly, the sale of apartments in facilities, the construction of which began after the entry into force of the Law of Ukraine "On guaranteeing property rights to real estate facilities to be built in the future" of August 15, 2022, which coincides with the principles of action, is already being carried out programs of "eOselya" in the primary market.

 

"In addition, deferment programs and 2 mortgage mechanisms, namely, the state "eOselya" and partner programs with banks, significantly expand the opportunities of developers to attract potential buyers, which can become one of the factors of increasing demand in the primary housing market," she emphasized.

The expert spoke in detail about the development of mortgages in the primary housing market. In particular, she indicated that in order to obtain bank accreditation and implement joint mortgage programs with developers, the following requirements must be met:
1. Active construction (dynamics construction works in real time) proposed for the accreditation of the residential complex.
2. The development company has all permits confirming the legality of construction.
3. Absence of any legal encumbrances that may affect the dynamics of construction.
4. The state of readiness of the object is at least 30% with clear deadlines for the completion of construction and putting the object into operation.
5. Realization of apartments should take place through construction financing funds, the mechanism of purchase and sale of property rights, targeted bonds.
6. Compliance of the object with the declared quality characteristics and housing class.
7. Market experience (portfolio of implemented projects), openness, professional and business reputation of both the company and its leaders.

"The accreditation process is, first of all, confirmation by the bank of the financial and technical ability of the developer to fulfill the obligations assumed to the investors-buyers , as well as compliance of the object with the declared quality characteristics. In fact, the bank assumes part of the developer's risks, guaranteeing buyers the safety of purchasing a home in one or another residential complex," the banker emphasized.

According to her, the main advantage of a mortgage on the primary market is still the possibility of purchasing modern quality housing at an average price of 25 30% lower than in an already built residential complex, because usually newly built apartments are more expensive due to a significant reduction in risks for buyers. In addition, the mortgage agreement actually "fixes" the price and protects the buyer from an unwanted increase in the price of the purchased apartment in the event of a decrease in the national currency.

Olena Dmitrieva drew attention to the fact that from the beginning of 202In the 4th year on the primary market, the greatest demand for mortgage housing (about 70% of all transactions) is observed for 1.2-room apartments with an area of 45 m2 to 70 m2 with a total cost of from UAH 2 million to UAH 3 million. At the same time, in the vast majority of cases, agreements are concluded for a period of up to 20 years with an initial contribution of 30% of the cost of the home. She noted that for potential borrowers-buyers, in addition to the price and area of the house, several more qualitative characteristics of the residential complex are important: 1) safety of living (location, region and city); 2) availability of self-sufficient infrastructure (recreational, children's, social and household, sports, etc., availability of spacious parking lots); 3) good location in terms of transport connections; 4) security of living in the housing complex itself (round-the-clock security, closed territory from outsiders); 5) the presence of recreational areas near the housing complex (for example, parks, forests, lakes).

"Since the beginning of the year, the trend of "high-quality competition" in the residential housing market has gradually resumed in the primary market, which is a good sign of the "recovery" of the construction market, and therefore the developers will have to concentrate their efforts not only on the terms of construction, sales volumes, expansion of purchase opportunities, but also on creating truly comfortable and modern housing," said the expert.

In her opinion, the main factors shaping the development of mortgage lending in the second quarter of 2024 will be:

1. The rhythmicity of receipt and sufficient volume of macro-financial assistance to cover current state budget expenditures (the stability of the national currency, which will encourage the NBU to further discount rate reduction).
2. Development of the economy and in particular the construction industry through the active involvement of construction and development companies in the restoration of the country.
3. Active development of credit and deposit banking programs: increased competition for clients.
4. "Military" factors: overcoming the consequences of aggression, the situation at the front.
5. Socio-political factors: social unity, transparency of government decisions and actions.

She predicts that from April to June 2024 in the primary market under the YeOsel program and joint mortgage programs of banks and developers can conclude a total of up to 200-250 mortgage agreements for a total amount of up to UAH 500 million. At the same time, about 80-85% of mortgages will be issued in Kyiv, Kyiv region and some regional centers, mainly in the western regions.

"Under favorable economic, political and military conditions, we can expect a further correction of the discount rate already in the second quarter - from the existing 14, 5% to 14-13%. Of course, joint-stock banks are already working out the possibility of reducing mortgage rates: depending on the term and size of the first installment, they can decrease to 5-17% per annum, which can be considered a positive signal for future home buyers on the primary market who decide to use both state mortgages and joint with mortgage program developers," concluded Olena Dmitrieva.