Advantages and disadvantages of preferential and pseudo-concessional mortgage programs — expert opinion

CrimeaPRESS reports:

Real preferential programs are measures of support from the state, while pseudo-concessional programs are called mortgage schemes for developers without a down payment or with a reduced mortgage rate, explained Newsm June 22, Executive Director of the financial marketplace «Vyberu.ru» Yaroslav Bajurak. The expert recalled that among the real preferential programs there are narrowly targeted ones, such as the Far East, rural, military and IT mortgages, as well as those designed for a wider population: family and preferential.

The latter can now be used by any Russian who plans to buy an apartment in a new building. This program makes it easier to buy an apartment in an environment of ever-rising prices, but at the same time, its affordability is fraught with the emergence of a mortgage bubbleBajurak said.

According to him, other, thematic state programs, mainly bring benefits to the economy: Far Eastern and rural mortgages help slow down the outflow of the population to large cities, family mortgages stimulate the birth rate, IT mortgages keep specialists who are needed to develop and support domestic software from emigrating.

Speaking about pseudo-privileged programs from developers, he noted that they are attractive to a buyer who does not have significant savings, or his salary is not enough for a monthly payment even at a higher rate.

The developer, in turn, also does not miss its benefits and overstates the final cost of the apartment. The Central Bank (CB) is concerned about this scheme, because if the borrower can no longer pay the fees, the housing will be impossible to sell due to the increased price. As a result, the regulator introduced surcharges for banks lending to people with a low down payment. Now it is 20% of the cost of the mortgage, and from January 1, 2024 it will be 30%. On the one hand, such a policy reduces risks, on the other hand, the availability of mortgages decreases.Bajurak says.

At the same time, he added that despite the restrictions of the regulator, many developers still offer pseudo-preferential programs, but not the entire term of the mortgage loan, but only at the beginning. So, this period can last from several months to several years.

While risky practices are not completely banned, perhaps, if the measures work, relief will follow, the expert concludes.

Earlier that day, the head of the Central Bank, Elvira Nabiullina, speaking at a plenary meeting of the Federation Council, said that the regulator was worried about the mortgage, which was pumped up with both preferential and pseudo-preferential programs, from the point of view of internal possible imbalances. She stressed that the Central Bank is taking measures to limit the rate of issuance of mortgages with a low down payment so that mortgages grow in a balanced way.

On June 14, VTB Deputy President and Chairman of the Management Board Anatoly Pechatnikov, as part of SPIEF 2023, presented the bank’s forecast to journalists, according to which, for the first time in the history of the Russian market, borrowers in 2023 will issue housing loans in the amount of more than 6 trillion rubles.

On May 22, the Vyberu.ru financial marketplace told Izvestiya that the demand for family mortgages in Russia in January-April 2023 increased by 32% compared to the same period in 2022. At the same time, the total demand for mortgage products from April to May increased by 10% compared to the same period in 2022.

source: News

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