In recent years, housing prices have outpaced inflation, the dollar, and wages
24 February 09:42
For four years in a row, the annual growth rate of housing prices has been double-digit, which is a rather alarming trend. Danylo Hetmantsev, Chairman of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy, draws attention to this in his post on Telegram, "Komersant Ukrainian" reports.
Citing data from the State Statistics Service, the MP states that over this period, i.e. over the past four years, housing has risen in price by an average of 67.9%, and in the dynamics of such a price increase, it has outpaced inflation over the same period (58.1%), the rise in the dollar (48.4%), and the real average salary by more than 3.5 times.
According to Danylo Hetmantsev, in 2024, average housing prices increased by 12.7%, in the primary segment last year they rose by 15.0%, while in the secondary segment – by 11.6%, and in total in 2021-2024, primary housing rose by 68.7% and secondary housing by 67.3%.
“Until 2022, housing was not affordable for Ukrainians, and the problem of housing availability was one of the most acute. After the outbreak of a full-scale war, the problem grew to unprecedented proportions, as millions of square meters of housing were destroyed,” the MP emphasized.
He also suggested that the updated report of the World Bank, the European Commission and the UN “Fourth Rapid Damage and Recovery Needs Assessment for Ukraine” RDNA4, which is expected soon, will contain even higher figures.
Restoring Ukrainians’ homes is a priority for the government
Recently, the Prime Minister stated that “one of the key areas of the Government’s work is the restoration of Ukrainians’ housing” and supported this thesis with two figures:
– uAH 18 billion in compensation paid for damaged and destroyed housing, which helped 90,000 families to restore or purchase new homes;
– uAH 15 billion for a new program of compensation for property for internally displaced persons, thanks to which 10 thousand families will receive resources for the purchase of real estate.
But, according to Danylo Hetmantsev, given the scale of the problem and the rate of growth of housing prices, it will take many years to solve the housing problem.
According to the MP, the situation with mortgages is complicated, and if we exclude the state program eHouse, which, however, has issued only 15.1 thousand loans totaling less than UAH 24.6 billion since October 2022, there is nothing much to talk about.
The NBU notes a slowdown in mortgage lending
In its review of the banking sector for the fourth quarter of 2024, the National Bank states that the growth of mortgage loans in the fourth quarter slowed to 7% for the quarter and 60.7% for the year. Mortgage lending continues to be concentrated almost exclusively within the state program “eHouse”, the gross portfolio of which increased to UAH 24.1 billion in the fourth quarter.
The December review of the banking sector also noted that mortgage lending is lively, but its volumes are determined by the dynamics of the state program “eHouse”, which dominates the market and leaves no room for the development of market mortgages.
“Recently, there have been attempts to redirect this program to the primary market, but its financial resources are limited. In view of this, lending slowed down at the end of the year,” the NBU said.
The NBU believes that the development of mortgage lending requires more active involvement of banks with market products, which requires strengthening of regulatory and legislative regulation of the real estate sector and improving the design of state support for mortgages.
The housing stock suffered the greatest losses as a result of Russian aggression
As of November 2024, 236,000 residential buildings were damaged or destroyed, of which 209,000 were private houses, 27,000 were apartment buildings, and another 600 were dormitories. Direct losses to the housing stock amounted to almost $60 billion. These data are provided in the latest report of the Kyiv School of Economics.
As noted, more than 50% of the housing stock in a significant number of cities and towns was damaged or destroyed as a result of the Russian Federation’s hostilities. The housing stock of large cities in the East suffered the greatest damage. These include Mariupol, Kharkiv, Chernihiv, Siverskodonetsk, Rubizhne, Bakhmut, Maryinka, Lysychansk, Popasna, Izyum, and Volnovakha. For example, in Sievierskodonetsk, 90% of the housing stock was damaged, while Bakhmut and Maryinka have almost no intact buildings.
The total area of damaged or destroyed objects by shelling is about 90 million square meters, or 9% of the total housing stock in Ukraine. Based on the results of detailed technical inspections of buildings, this ratio may change. The area of buildings in the flood zone amounted to another 4.8 million square meters. In total, this left about 1.4 million households (about 3.4 million people) homeless or with damaged housing.
The total amount of direct damage caused to Ukraine’s infrastructure as a result of Russia’s full-scale invasion reached almost $170 billion. Compared to the beginning of 2024, this figure has increased by $12.6 billion, which is the result of further destruction due to missile attacks and hostilities. The housing stock, transportation infrastructure, and energy sector suffered the greatest losses.
