The banks owned by the Ukrainian State will collectively begin to start loaning for mortgages in an effort to stimulate the housing market from August according to Serhiy Podrezov, CEO of Oschadbank.
The anticipated loan rate will be at 14% which will eventually drop to 12%. Blimey! Still a long way above most of the continent although, to be fair, considerably lower than the 27% interest rates pre-crisis.
It is also interesting to note that the mortgage maturity is between 3 and 5 years unlike the 25 – 30 years on the rest of the continent. In effect it is nothing more than a short term real estate loan.
The fund allocated is a mere UAH 35 million, or about $ 4.5 million, which is of course, nothing. In Odessa that will be enough for two or three top end good houses or penthouses, or about 36 reasonable apartments. In a city like Kyiv it will buy even less.
Farcical to think that this will stimulate anything even if, as usual, the potential home owner has to stump up 50% cash and borrow the rest thereby making the financing of 36 Odessa apartments 72 with the additional elasticity to the funds created.
Why I am making comparisons to Odessa is yet another farce as this money will never get out of Kyiv.
Anyway, if you fancy a punt at becoming one of the very few who will soon devour this tiny pot of money within a few days, then the State owned banks to which you should apply are Oschadbank, Ukreximbank, UkrGasBank and Kyiv Bank.
Feeling stimulated? No? Neither will the housing market!