Banks providing housing mortgage loans expect that during the year average monthly mortgage volumes would grow by 10%, according to a poll of the National Bank of Ukraine (NBU) published in the fifth financial stability report. “Banks-respondents expect further growth in volumes of housing mortgage loans. Thirteen banks [out of 24 polled] predicted that in next 12 months average volumes of mortgage loans would grow by over 10%. Five more banks expected growth less than 10%. Six banks projected the unchanged volumes of new loans,” the NBU said in the report.
At the same time, the NBU said that the existing volumes of mortgages cannot affect the residential real estate market. The volume of lending in the first quarter of 2018 increased 3.9-fold and amounted to UAH 565 million. However, issuing less than 3,000 loans a year cannot affect the market: only in Kyiv on the secondary housing market annually more than 30,000 purchase and sale contracts are signed.
According to the poll, in 2017 and in the first quarter of 2018, the purchase of housing in the secondary market was dominated by the number of contracts and the volume of lending. At the same time, the volumes and number of loans issued under the partnership programs of banks with developers are gradually increasing.
According to banks, the main obstacle to the resumption of housing mortgages is the deficit of solvent borrowers with officially confirmed incomes. Thus, in the first quarter of 2018, the average debt service-to-income (DSTI) was 45%, which is 3 percentage points less than a year earlier. At the same time, 18% of the volume of loans granted is accounted for by borrowers who will spend more than 70% of their income on debt servicing. The NBU said that the circle of mortgage creditors remains limited.