Секция - “Экономические науки»

Подсекция – 13. Региональная экономика

Razumova A.V.

Pridneprovsk State Academy of Construction and Architecture

Improvement of purchase conditions of dwelling by the population

The problem of my research is connected with the conditions of housing sector in Ukraine. There are many unsolved questions in different spheres of life in Ukraine, but housing problem is one of the most urgent social and economic problems.

At the beginning of 2006 73720 families and single people are fixed in turn of getting dwelling in Dnipropetrovsk region. The significant part of them (64,6 thousand people) was on the account of getting dwelling for social purpose (free of charge). Another part (9,1 thousand people) is in turn of getting dwelling in housing-construction co-operatives. More than a quarter of families and single people which are in turn on receiving dwelling have the priority rights.

The housing problem solution rate sharp declined during 1990-2006. In 2006 only 1,7% of housing waiting list (1278 families and single people) improved they housing conditions.

In 2006 against 2005, the average monthly salary for working citizen in Dnipropetrovsk region amounted to 1139,05 grn., having increased by 24,7%. At the same time, the average cost of one square meter on city has made 800 US dollars (4000 grn.).

In the solution of housing problem the significant role is played the maintenance and safety of existing housing. During 2006 it has been spent 230,4 thousand grn. for capital rebuilding of the living space fund in Dnepropetrovsk region. The total area of the rebuilding dwelling has made 765 m2 (in 12,5 times less in comparison with 2005).

The rate of house building sharp falling from the 1990 and it is one more reason of increasing in demand and therefore escalation house prices. If in 1988 in Dnepropetrovsk region it has been constructed 1,88 million square meter of newly erected buildings, in 2006 this parameter made only 401,75 thousand square meter.

Mortgage crediting is the possibility of granting to private persons to have long-term credits for dwelling purchase on the security of received dwelling.

However, despite of different advantages, the hypothec crediting is accessible not to everybody because the habitation which is under the programs offered now by the Ukrainian banks and financial establishments, considerably raises changes in price. The high cost of hypothec credits is caused by the fact that forming resources due to deposits in cost of 9-10 % the Ukrainian banks cannot give long-term credits under 6 % annual (as in the USA). Besides the short-term character of deposits creates for the banks which are giving out credits for 10 years, additional risk of decrease in liquidity. In spite of the fact that at present the financial market is accessible for foreign banks, from the point of view of experts, in the nearest future the rates under hypothec credits can decrease by 1-2 %.

One of the ways that makes loans substantially cheaper and helps to raise money for terms comparable to the loan “length” is a securitisation. Such operation was carried out in the USA in 1977 for the first time. In the report of the some rating agency determined that assets securitization are considered as the most significant financial innovation of the second half of XX century.

Securitization is an operation of bonds issuing secured by credits given earlier. Sometimes such operation is conducted not only by bank but by an enterprise and agreements on equipment supplies which usually serve as a mortgage. Bonds are sold to all persons interested and an emitter receives money that can be directed at new loans delivering as well as production development. He guarantees that in case he is not able to carry out his obligations to bonds buyer he will return money after mortgage object is sold.

Securitization allows to obviate this terms gap because securities are issued for the same approximate “length” as assets by which they are secured. If hypothec credit is given for ten years bonds secured by it are issued for the term of nine years. Securitization has some other advantages. For example, an emitter receives at his disposal a sum that approximates to an amount of securing. As a result this money can be reinvested and general income can be increased owing to turnover growth.  

Thus, taking into account insignificant volumes of construction, condition existing available housing and adverse situation for building development, the housing problem will remain urgent for long time. To lower dwelling cost, it is necessary to solve a problem of mass housing construction, in this process the state should play the leading part.

First, this is change of the existing imperfect legislation in sphere of land relations and constructions. It is necessary to adopt the laws, which must strictly regulate the building market activity. Improvement and adjustment the level of financial institutions development to modern requirements is important too.

At the same time, we should preserve the system of providing accommodation for the least protected groups of population, which will be financed by state and local budgets. Special attention should be paid to stimulating private building in the countryside, providing accommodation for servicemen and supporting house-building for youth. Active housing policies, transition to large-scale house building are a key factor of general enhancement of economy, intensification of the domestic market development and reinforcement of its social orientation.

The problems of the real estate market development consist in the fact that it should become the tool of maintenance of the population habitation, and also have strong support on behalf of the state. The institute of habitation should have the basic function - maintenance of the population with habitation.

Literature:

1.    Статистичний довідник «Дніпропетровщина у цифрах у 2006 році» // Відповід. за випуск І.В.Почиталіна. – Дніпропетровськ.: Головне управління статистики у Дніпропетровській області. – 2007. – 200 с.

2.    Статистичний щорічник Дніпропетровськой області за 2005 рік // За ред. О.Г. Осауленка. – К.: Вид-во “Консультант”, 2006. – 631с.

3.    Климов В. Ипотечное кредитование: Ключ к доступному жилью? / Строительная газета. - №46.- с.11.

4.    www.mortgagecreditproblems.com

5.    www.myland.iatp.org.ua