Over the past two years (2022-2023), despite the closure of the register and the halt in real estate sales for several months after the start of the full-scale war, Ukrainians purchased over 273,000 real estate properties. This indicates a significant demand for housing despite the crisis, as noted by Olena Shulyak on her social media.
Read more: Ukrfinzhytlo has launched a chatbot for the eOselia program
Results of the “eOselya” Program
However, the state mortgage program “eOselya,” which aims to support citizens in acquiring their own housing, has shown rather modest results. Over the two years, only 13,000 families obtained housing through this program. This is less than 5% of the total number of transactions. Given the immense housing needs in Ukraine, this figure appears minimal:
- Approximately 6 million internally displaced persons (IDPs);
- 600,000 people on the housing waiting list;
- A significant amount of damaged and destroyed housing.
In such conditions, the “eOselya” program, which offers loans at 3% (preferential rate) and 7%, should have become the most sought-after state product. However, it has not met expectations. For instance, only 300 IDPs received a loan through this program.
Main Problems of the Program
The main reason for the low level of demand is the overly complicated conditions for obtaining a loan. Here are the key issues:
- High Minimum Down Payment: A 20% down payment requirement automatically excludes a large portion of people who need housing but cannot gather such funds.
- Bureaucratic Procedures: The lengthy loan approval process leads to potential buyers losing the chosen apartment, which ends up being sold to someone else.
- Limitations to the Primary Market: The program only applies to the primary real estate market, limiting opportunities for many who seek housing on the secondary market. This is particularly problematic in small towns and regional centers where new housing is scarce.
- Interest Rates: The 3% loan rate is available only to military personnel, medical workers, educators, and scientists. For all other program participants, including IDPs and veterans, the rate is 7%.
Suggestions for Improving the Program
To make the “eOselya” program an effective tool for addressing the housing crisis, the following measures should be implemented:
- Reduce the Interest Rate for IDPs and veterans to 3% to alleviate financial pressure on these groups.
- Lower the Down Payment from 20% to 15% to make participation in the program more accessible to a wider range of people.
- Increase the Acceptable Age of Property from three to ten years to allow more housing options, including those on the secondary market.
These changes will help make the “eOselya” program more effective and accessible for those who need housing the most in Ukraine.
