How to buy an apartment with an average salary in Kiev

In Ukraine, according to official data, more than 400 thousand families live in rental housing. Gather up to buy their own square meters with an average salary, experts say, is extremely difficult. Mortgage in Ukraine is one of the most expensive among the European countries – about 20% per annum. And save from the salary budget real estate have for many years. The website “Today” figured out how the Ukrainians to gather on accommodation in Kiev.

Option # 1: Deposit and defer part of the salary

The average salary in Kiev – 9832 hryvnia, according to the state statistics service. The Ukrainians, who have learned to correctly manage your income, can save monthly up to 30% of salary, says the founder of the training center “Cashflow Ukraine” Alexey Polovinkin. 30% of the Metropolitan average wages – approximately 3000 UAH. For this money you can buy a 110 dollars. If during the year every month to buy $ 110 for 12 months you can save $ 1320. This amount is sufficient to open a Deposit account in the Bank.

At the moment the average Deposit rate – 6% per annum. If the initial capital ($1320) a year to place on Deposit account at the Bank, after 12 months you can get $ 1400. However, if you continue to postpone every month 30% of salary (about $ 110 given that the hryvnia devaluation offsets the increase in salary), within two years, the Deposit can be put 2720 dollars.

One-bedroom apartment in the capital, says the realtor Maxim Baborak, at the moment you can buy an average of 29 to 30 thousand dollars. The amount you can collect in 15 years.

“I would say that with average salary to collect at the apartment impossible. But if someone is going to postpone 15 years, and who knows what will happen with the market in 15 years? Perhaps during this time, a Studio apartment will cost 100 thousand dollars? But those who decided to leave did the right thing. If the apartment is purchased and does not work, it will be the initial contribution for a mortgage. Yes and it is very difficult to defer 30% of salary, that means 15 years to restrict myself in everything,” – says the expert in the field of real estate.

“Having a minimum wage, it is unrealistic to defer to the apartment. And for those who can pay monthly contribution of 10 000 UAH no impact on the budget, it is better to gather up for a larger down payment. Assuming the average Ukrainian wage in more 6700 UAH impossible to save up for an apartment for 5 years. Putting aside annually for $ 2,000 at 8% per annum in 8 years we will receive approximately $ 22,000, of which it is already possible to make the first payment on an apartment. Or continue to save, and after 4 years you can buy an apartment that costs 40 000 dollars”, – said the analyst “Alpari” Maxim Parkhomenko.

However, this option is associated with certain risks. Note, in the beginning of the crisis in Ukraine was around 180 banks, currently about 100. As explained by a senior analyst at Concorde Capital Oleksandr Parashchiy, it is better to open two deposits in different banks for the amount of 200 thousand hryvnias, than one Deposit of 400 thousand. If the Bank closes the Deposit guarantee Fund will be returned to the client Deposit amount of 200 thousand hryvnias, the rest “will burn”. Another opportunity not to lose the Deposit in the Bank to invest in public companies. Under current law, the state Bank in case of its closure should return the deposits of all customers in full.

Option # 2: receive a loan (with an average salary impossible)

One-bedroom apartment with respect to the actual dollar need about 762 thousand. State Bank “Oshchad” gives a mortgage for up to 20 years. However, give the loan is not for everyone – must be a stable high income, 25 years of age and, preferably, already have a car or housing. In addition, you will need the first payment – at least 30% of the cost of the apartment. At the moment it is 228 thousand hryvnias. If the remaining amount to get a mortgage at 22% per annum for 20 years, on a monthly basis to give the Bank will have 10770 hryvnia, which is more than the average salary in Kiev.

As a result, if you take a Bank 580 thousand hryvnias, in 20 years will have to pay 2 million 585 thousand. Experts believe: if the overpayment is more than two times more profitable to rent housing.

“Pay to the order of 20% for mortgages, which lasts five years it is overpayment in two or more times. So the question arises, is there any point in your mortgage? Sometimes it is more profitable to rent housing,” – says the expert of the mortgage market Vladimir Mazurenko.

Ukrainian banks are unable to lend at a small percentage due to the large risks, says the Director of the Institute of financial controlling KNEU Oleg Tereshchenko. “For banks this is a risky product, this risk has to lay in the cost of lending,” – says doctor of economic Sciences.

“If you take into account the mortgage for 10 years, then the overpayment will be about 100%. For registration of the mortgage in the standard version to the customer will require a minimum of 30% down payment. So, if you consider the fact that in Kiev in the primary market, the apartment can be purchased for $ 40 000 or 1 300 000 UAH, the client per month apartment will cost at least 10 800 UAH. Considering the average salary is cloud amount. Adequate option is to make a greater down payment of 50%. Due to this, you can get more loyal interest rate of around 10% per annum”, – says the analyst of “Alpari” Maxim Parkhomenko.

According to him, now on the market it is possible to get a mortgage from the Builder under 6.9%, reducing the monthly payment to 6600 UAH (term 10 years).

At an average rate of 10% actually buy an apartment at the stage of laying the Foundation with a discount of 20% from its initial value. Thus, you can save considerably.

Option # 3: the Contract of life maintenance

The annuity contract is often signed with pensioners living alone. The owner of the apartment immediately give 30% of the value of the property, he can live in his apartment until the end of life. On the market there are dozens of companies who for a Commission find families of single pensioners. In Kiev for ten thousand dollars, the young family may enter into a contract of life maintenance.

After that, the family is actually the homeowners, but to access it they will be able only after the death of the pensioner. In addition, before the end of the life of the young people agree to pay the retiree a specific monthly amount (for example, a thousand hryvnia) and to pay the “communal”.

Says Maxim Baborak, in Kiev, such a “deal” does not enjoy great popularity. In addition, the pensioner just have to give 30% of the value of his apartment – so for this option, the required initial capital.

Option # 4. Assistance from the state

According to article 47 of the Constitution, free housing provided for the citizens who need social protection. In fact, under this category fall a thousand people – orphans, disabled, large families, etc However apartments are only a few.

So, last year the keys to the new housing the mayor Vitaly Klitschko presented to the winner of the Eurovision Jamal, several employees of municipal service, several families of the victims in the Donbas fighters, the sister of the poet Vasyl Stus. Traditionally the queue for free housing of several thousand citizens there are in each regional centre. To issue a warrant, it will take hundreds of years.

There is a chance to move into “service” apartments to employees of the SBU, prosecutors, police. Officials in the “office” needs regularly allocate apartments. They live without the right to privatization in particular need of the security forces.

Klitschko shows Mary Stus presented apartment. Photo: KCSA

For example, Council decision of 24 February of the current year in service one-bedroom apartment on the Boulevard of the guards settled the Prosecutor of the Zaporozhye regional Prosecutor’s office Anna Fomina.

If the prosecution decides that a service apartment is no longer needed, the Executive Committee reports its security forces with the right of privatization. On July 31, 2015 in Zaporizhia city Executive Committee gave one-bedroom apartment on the street of the Cossack one of the prosecutors of regional Prosecutor’s office Vitaly dem’yanov. Previously, the apartment was listed as “employed.”

In addition, in Ukraine there are several programs concessional lending. The government compensates 30% of the cost of housing, the remaining amount can be paid at a small percentage. However, tens of thousands of applicants nationwide, these loans get several hundred Ukrainians in the year. For example, in 2015 the program of preferential crediting have used a total of 248 families (report for 2016 has not yet been published). To Finance the program had at the expense of the local budget – the money in the state budget was not.

How to solve the problem of housing in other States

Cheap loans. In developed countries, where the risks for banks less, and the rate of inflation can vary between one percent per year, mortgage can be taken at 3-5% per annum. So, in the US you can get a housing loan (called a mortgage) with a fixed rate of 3.72% per annum for 30 years. For example, a client who took a loan of 200 thousand dollars, the Bank in 15 years will receive 252 thousand dollars. Monthly have to pay about 1400 dollars. The average salary in the United States – more than $ 3,000.

The state of the program. In Kazakhstan for several years has the program “Nurly Zhol”. The budget is built cheap housing, which then leased the family for 20 years at a minimum rate. And after 20 years, a family that rents an apartment, will be able to privatise it. For example, in 2015 in the framework of the program “Nurly Jol” received apartments 7237 families.