Housing Crisis in Ukraine: From Chronic to Critical

Danilo Hetmantsev, a member of the 'Servant of the People' faction and head of the Verkhovna Rada Committee on Finance, Tax, and Customs Policy, has stated that as of early 2026, the housing problem in Ukraine has transformed from a chronic issue into a critical one. He noted that the statistics are alarming: over 3 million households, which represents nearly every third or fourth Ukrainian family, have been affected by the destruction of housing stock in one way or another. When adding to this figure 4.5 million internally displaced persons and hundreds of thousands who needed improved housing conditions even before 2022, the total number far exceeds the actual capabilities of existing programs.

Currently, mortgages in Ukraine are not just a banking product; they have become both an economic and social tool. The construction sector has emerged as one of the key drivers of the country's recovery. According to Hetmantsev, the figures speak for themselves: in 2025, construction growth reached 11.3% following increases of 17.8% and 31.8% in the previous years. This sector was the first to return to pre-war indicators from 2021.

Last year alone, residential construction amounted to 34.5 billion hryvnias. Behind every construction project are metallurgists, manufacturers of building materials, and finishing products, which provide tens of thousands of jobs and generate billion-hryvnia revenues for budgets at all levels. However, Hetmantsev believes that developers have become hostages to the lack of long-term financing, as bank lending remains the number one problem.

Why is this critical for society? By the end of 2025, the losses to the housing stock are estimated at 61.1 billion dollars. Fourteen percent of all housing in the country has been damaged or destroyed, and the war has eroded the savings of Ukrainians. According to the World Bank, one in three Ukrainians is currently classified as poor, making it nearly impossible for them to purchase housing with their savings. Mortgages are becoming the only viable option.

Hetmantsev pointed out that the eOselya program, launched in the fall of 2022, has issued 24,600 loans amounting to 42.8 billion hryvnias during this time. However, when compared to the recovery needs that the UN and World Bank estimate at 89.8 billion dollars over the next decade, it becomes clear that the current pace is catastrophically insufficient.

Why is the program not operating at full capacity? Firstly, there is low purchasing power: teachers, medical workers, and scientists make up only 7% of the recipients. With current salaries, banks find it difficult to confirm their ability to service a loan over 15 to 20 years. Secondly, geography plays a role: the program is almost non-existent in frontline regions. In Sumy Oblast, only 243 loans have been issued; in Kharkiv Oblast, 231; and in Kherson Oblast, none at all. Thirdly, demographics are a concern: only 365 families with three children have taken advantage of the affordable mortgage option, which is just 1.5% of the total. For a country in a demographic crisis, this is unacceptably low.

Hetmantsev emphasized that the current format of the eOselya program cannot address the problem effectively. Ukraine needs a comprehensive national program for reconstruction and renovation that will change the very logic of the process. Among the key steps proposed are the implementation of Directive 2014/17/EU, expediting Bill No. 13435 on European property valuation standards, merging the State Youth Housing and Ukrfinzhytlo for unified coordination, transitioning from budget mortgages to a compensation model, and introducing new financial instruments such as escrow accounts as proposed by the National Bank of Ukraine and developing the securitization market.

Hetmantsev called for action, stating that it is time to take this step for 1 million families. This means a loan term of up to 25 years, an interest rate of 3-5% per annum, and a payment that does not exceed 20-25% of the family's income (or equal to the rental rate plus 10-20%). Only such scale and conditions will resolve the Gordian knot of the housing problem and provide Ukrainians with a solid foundation to return home and live in their own country.