Kyiv, September 11 (Interfax-Ukraine) – The share of banking credits during the purchase of apartments on the primary housing market in Kyiv in January-August 2014 was only 2% of the total number of deals, Director of City Development Solution (CDS Kyiv), Yaroslava Chapko has said.

"According to our assessments, the share of banking crediting is no more than 2% of the deals," she said at a press conference at Interfax-Ukraine in Kyiv on Wednesday.

Chapko said that by the end of this year it is unlikely that the indicator will grow, it could fall, as developers in the capital present rather friendly conditions for the purchase of apartments in installments. In addition, there is a high likelihood of the decline in the small number of banks providing mortgage credits, she added.

Deputy Board Chairman of Ukrgasbank (Kyiv), which is under control of the Ukrainian government, Olena Dmitriyeva said that after entering the mortgage crediting segment of the primary housing market as a participant and partner of the affordable housing program the financial institution has not been disappointed in the market: the share of overdue payments for the primary market is the lowest in its portfolio of troubled retail credits.

She said that the total volume of mortgage credits of Ukrgasbank in January-August 2014 plunged by seven times year-over-year. The reasons of this is the suspension of the issue of new credits due to the absence of financing by the state under the state program of beneficial mortgage crediting at 3% per annum and rather high effective credit rate for mortgage credits on the general conditions for individuals (22% per annum).

"We issued [credits worth] UAH 390 million in the eight months of last year, and now this is UAH 55 million in eight months," the banker said.

Dmitriyeva said that Ukrgasbank today continues crediting apartments purchase on the primary housing market in Ukraine both by individuals and companies, and for some constructors that are partners of the bank in the first three years the effective credit rate is 13.9% per annum.

"Everything depends on the policy of constructors and what compensation they could give to the bank [during crediting of citizens]. We reach own credit rate anyway," she said, adding that the realization of the affordable housing programs should be resumed to develop the mortgage market in the country.

Director of Investment and Sales Department at Liko-Holding (Kyiv), part of Liko Group, Larysa Lomakina said that constructors should ask the state for support of the resumption of financing and further realization of state affordable housing programs. She said that one of the most poplar programs being realized by Liko-Holding was the state program 70% to 30% when the state compensated 30% of the price of an apartment.

As for crediting of citizens to buy apartments by banks on the general conditions Lomakina said that there is almost no such support of banks in Ukraine. Credit rates of some banks providing mortgage credits reach 25% per annum.

"This is unreal ramping of our future investors. Today the credit scheme and mortgage almost do not work in Ukraine. It has not been working for two years," she said.

Lomakina said that due to this fact, constructors today use compensation of up to 5% of the mortgage rate to banks when individuals buy apartments. Thus, citizens pay around 18-19% per annum for credits, Lomakina said.