MORTGAGE REAL ESTATE MARKET: LENDING TO HOUSEHOLDS BY COMMERCIAL BANKS OF UKRAINE DURING THE STATE OF MARTIAL
Authors: Zharikova Olena , Pashchenko Oksana , Grebenyuk Tetiana 
Published: April 2024

The goal of the formation of a modern mortgage system in Ukraine is to create an effective market mechanism based on attracting long-term financial resources to the financial and credit sphere and ensuring the functioning of the long-term mortgage market using modern market infrastructure and financial instruments. Under such conditions, it will contribute to solving the following tasks: attracting domestic and foreign investors to the long-term financial resources of the Ukrainian economy; increasing the solvency of the population and solving housing problems; activation of the real estate market; development of the stock market and the market of financial services, including the banking and non-banking sectors, to stimulate the development of the national economy, especially the construction economy and related sectors of the economy and agriculture.
Mortgage loans are provided on a long-term basis. A mortgage loan is possible only if the land and real estate are privately owned. This allows landowners to finance the additional purchase of plots of land, and entrepreneurs to increase production. So, a mortgage loan is a method of obtaining a loan (the so-called mortgage loan) by using immovable property (mainly land and real estate) as collateral, which has its own characteristics. First, with a pledge (mortgage), land and real estate remain in the possession and use of its owner. Secondly, a special civil legal system has been created, which is regulated by law. Thirdly, unfulfilled obligations are repaid at the expense of the subject of the mortgage.
It is also worth noting that the essence of a mortgage is most fully reflected in its principles: payment, differentiated nature of loans, timeliness of repayment, etc. They ensure the harmonious functioning of the mortgage mechanism and represent the rules of conduct of all market participants in their activities. Demand, supply, market prices and competition are key factors that determine the situation on the mortgage market in Ukraine and the world. In developed countries, demand in the housing market is balanced by large volumes of construction, and although the costs of developers are increasing, prices are almost unchanged due to fierce competition. The volume of lending to households in Ukraine according to the target direction for the period of 2018-2022 shows an upward trend. The total volume of loans granted to households increased from UAH 201,102 million. in 2018 to UAH 221,105 million. in 2022, which is 10% growth. Consumer loans occupy the largest share in the total volume of lending to households. In 2018, their share was 75.4%, in 2022 - 85.3%. In 2022, the volume of consumer loans decreased by 13% compared to the previous year. The volume of loans for the purchase, construction and reconstruction of real estate in 2018-2022 shows an unstable trend. In 2020, the volume of such loans decreased compared to the previous year, in 2021 - increased by 25.5%, and in 2022 ‒ decreased by 11.9%. The volume of other loans in 2018-2022 shows an upward trend. In 2022, the volume of such loans increased by 121.4% compared to 2018. Mortgage loans make up a small share of the total volume of loans. In 2022, the share of mortgage loans in the total amount of loans was 10.6%.
Therefore, in the structure of crediting, there is a tendency to increase the volume of consumer lending and decrease the volume of mortgage lending. This is due to the fact that during the martial law, banks began to provide less credit to the population due to the high probability of default. Mortgage lending mechanisms implemented by banking institutions are currently represented by lending programs for citizens who invest funds in real estate on the terms of equity participation or purchase ready-made housing on the primary or secondary markets.
The state program "eOsel" at the rate of 3% per annum can be used by military personnel under contract ‒ defenders of Ukraine, security forces and their family members, medical workers, pedagogical workers, scientific and scientific-pedagogical workers. War veterans, participants in hostilities, IDPs and citizens who do not have their own housing larger than the standard area can get a loan for the purchase of housing at the rate of 7% per annum. According to the results of the study, it can be stated that many factors, including the unstable economic situation in the country, the low standard of living of the population in most of Ukraine, the process of immigration for the purpose of earning, the high cost of housing and the increase in demands on banks do not contribute to the popularization of mortgage loans in Ukraine among the population. A prerequisite for the further development of mortgages as a form of attracting financial resources is the activation of mortgage lending, which will solve many of the country's socio-economic problems. First, ensuring the prospective development of housing construction. Secondly, solving the problems of lending to agro-industrial complex enterprises. Thirdly, promoting the general economic reform of the country.