Experts: apartments have risen in price by 82% since the existence of preferential mortgages
CrimeaPRESS reports:
Since the announcement of subsidized mortgages in April 2020, the proportion of available housing under the program has declined and prices have risen substantially. The results of three years of the program are in the report .Analysts.
BRIEFLY ABOUT THE MAIN
- Three years ago, at the start of preferential mortgages, 77% of apartments for sale fell under the program (with a down payment of 15%).
- An increase in the lending limit (from 3 to 6 million rubles in the regions and from 8 to 12 million in Moscow and St. Petersburg) two months after the launch of the program made it possible to increase the choice to 92% of all objects for sale. This is the maximum value for all three years.
- Reducing the loan amount to 3 million rubles in July 2021 made it possible to buy only 16% of apartments instead of 84% a month earlier.
- Further price increases led to a reduction in the share of housing available on preferential mortgages from 16% to 4% in March 2022.
- The second increase in the limit in the spring of 2022 allowed the program to cover only 74% of the market. Partially, the issue was resolved through a combined mortgage with a maximum amount of up to 15/30 million rubles.
- By April 2023, despite a minimal increase in prices, the share of apartments available under a standard preferential mortgage has decreased from 74% to 70%.
- Average cost per sq. m for three years of preferential mortgage increased by 82%. For the first year of the program, the growth was 32%, for the second — 33%, for the third — 4%.
- With a minimum down payment, the average monthly payment in all cities has doubled in three years.
IMPORTANT
Further calculations take into account apartments in buildings under construction (not handed over), the sales of which are carried out according to the DDU. Russian millionaires (16 cities), Moscow and Leningrad regions were analyzed.
At the start of preferential mortgages, 77% of apartments fell under the program
In April 2020, the terms of the preferential mortgage assumed the issuance of a loan at a rate of 6.5%. The loan limit was not to exceed 8 million rubles for the capital regions and 3 million rubles for the rest. The minimum down payment was 20%. That is, for the capital regions, the maximum cost of an apartment should not exceed 10 million rubles, and for the rest — 3.75 million.
With a minimum down payment, 77% of apartments in million-plus cities fell under the preferential mortgage program. Residents of the Moscow and Leningrad regions also received the maximum benefits, where 98 and 100% of the supply, respectively, were within the limit. In Moscow, despite the increased lending limit compared to other regions, 49% of lots were available on preferential mortgages, in St. Petersburg — 85%.
But in a number of regional millionaires, less than half of the housing in new buildings fit into the program. In Yekaterinburg it was 37%, in Kazan — 42%, in Novosibirsk — 48%. That is, the designated limit for these regions turned out to be irrelevant.
The average area of housing available on preferential mortgages was 46.5 square meters. m against 57.4 sq. m on average in the market (that is, 19% less), and the average supply budget is 3.2 million against 4.5 on average in the market (-29%).
After increasing the limit, the choice has expanded to 92% of objects
The initial lending conditions in April 2020 did not correspond much to real prices — similar ones were in effect under the 2015-2016 state support program.
But two months after the approval of the preferential mortgage, at the end of June 2020, the loan limit increased from 6 to 12 million for the capital regions and from 3 to 6 million for the rest. That is, with a down payment of 20%, the maximum cost of an apartment increased from 10 million to 15 million rubles and from 3.75 million to 7.5 million rubles, respectively.
With the new lending terms and with a minimum down payment of 20%, the proportion of properties eligible for the program has increased from 77 to 92%.
The lowest coverage growth was recorded in Moscow (76 vs. 49% at the start of the program), Kazan (84 vs. 42%) and Yekaterinburg (85 vs. 37%). Less than 90% of apartments were suitable for the updated program in Nizhny Novgorod (88%). In other million-plus cities, at least nine out of 10 apartments could be purchased on a preferential mortgage with a minimum down payment.
The average area available on a preferential mortgage at that time increased from 46.5 sq. m to 54.2 sq. m with an average market size of 58.9 «square». And the average budget of a deal on a preferential mortgage increased from 3.2 million to 4.1 million rubles, which was still 17% lower than the market value of 4.9 million.
The average cost of new buildings quickly responded to the emergence of subsidies. At the start of the program in April 2020, the average price per sq. m in the primary market of million-plus cities, Moscow and Leningrad regions amounted to 77.5 thousand rubles. A month later — 79.2 thousand (+0.4 per month and + 2.1% from the start of the program).
The rise in prices occurred despite falling demand and lockdowns. In the spring of 2020, strict restrictions were in place in Russia related to anti-epidemic requirements. Sales offices were actively reorganized for remote work, but this still led to a drop in interest. For example, in the Moscow region, sales in April 2020 decreased by 25% compared to March, and by another 35% in May compared to April.
With the growth of credit limits, the average size of the down payment also increased. If at the start of the program, with the limits in force at that time, it was 640 thousand rubles, then since June, due to the opportunity to purchase an apartment more expensive, it has already been 810 thousand (+ 27%).
Reducing the minimum contribution did not lead to an increase in the share of affordable apartments
From August 1, 2020, the down payment under the preferential mortgage program has decreased from 20% to 15%. Accordingly, the buyer could pay a smaller part of the cost of the apartment, but while maintaining the previous limits (12 and 6 million rubles), the maximum cost of objects in this case decreased from 15 million to 14.1 million rubles in the capitals and from 7.5 million to 7.1 million rubles in the regions.
The share of suitable housing in million-plus cities with a down payment of 15% has decreased to 90%. To expand the choice, it was necessary to make more than 15% of the cost of the apartment.
Rising prices led to a reduction in the proportion of suitable housing
Initially, the preferential mortgage lending program was valid only until November 1, 2020, but just a few days before the end, it was decided to extend it until July 1, 2021. Before that, expecting that benefits would soon disappear, buyers were highly active, and developers increased value.
At the end of October 2020 — a few days before the end of the terms of concessional lending — the average cost of a square meter. m amounted to 87.5 thousand rubles (+13% for six months from the start of the program, +5% by August), and the share of affordable housing decreased to 87%.
In the future, the trend continued: the average cost of a square. m increased, and the proportion of suitable housing decreased, but at a minimal pace. By June 2021, the limit of apartments that could be purchased on a preferential mortgage was reduced from 87 to 84%. Average cost per sq. m for the same period increased by a quarter, from 87.5 thousand to 110.4 thousand rubles.
Reducing the lending limit led to a decrease in the share of affordable housing to 16%
The government refused to completely cancel the preferential mortgage program, but significantly limited the maximum lending limit. This made the program irrelevant for many cities.
From July 1, 2021 to this country had a single lending limit — no more than 3 million rubles could be taken into a mortgage.
This decision led to the fact that the share of affordable housing with a down payment of 15% decreased from 84 to 16%.
The maximum cost of an apartment has decreased to 3.53 million across the country (in the capital regions — from 14.12 million rubles, in the rest — from 7.1 million).
The most difficult situation was in Moscow, where there was no suitable housing left at all, as well as in Kazan (1% of the total) and Krasnodar (4%). In St. Petersburg, the limit was enough for every tenth apartment, in the Leningrad region — for 13% of the total, in the Moscow region — for 5%.
Only in Volgograd and Rostov-on-Don, a little more than half of the housing was suitable for the new criteria — 53 and 54%, respectively. For the remaining millionaires, buyers with a minimum down payment were cut off from half of the primary market.
The possible average budget has also significantly decreased: back in June 2021, under the old limit, residents of large cities could purchase an average of 50.7 sq. m, but in July this figure dropped to 36 sq. m.
Further, from July to March 2021, the average cost of a sq. m increased by 20% to 135.9 thousand rubles. Because of this, by March 2022, the proportion of housing eligible for the program has decreased from 16% to 4%. In addition to Moscow, where there were no suitable options immediately after the limit was lowered in July 2021, Kazan, the Moscow Region, and St. Petersburg were among the cities left without preferential mortgages.
Residents of the Leningrad region, Nizhny Novgorod, and Krasnodar have 1–2% of the available offer on preferential mortgages. Volgograd residents were more fortunate than others, where even in the new budget and taking into account the increase in prices, 46% of apartments were suitable for the conditions of the program.
The repeated increase in the limit allowed us to cover 74% of the market
As a measure to support the industry, after a sharp increase in the key rate at the end of February 2022, the preferential mortgage program was revised again. The rate increased from 7 to 12%, and the limit was again increased to 6 and 12 million rubles, as it was before July 2021. The updated program has been operational since April 2022.
The increase in lending allowed increasing the share of affordable housing with a minimum contribution from 4% of the total supply to 74%. In the previous period, when the same limits were in effect, the proportion of housing suitable for preferential mortgages was 84%.
By April 2023, the availability of housing on preferential mortgages has decreased to 70%
Over the past year, the cost of housing in the market of new buildings has increased by 3.9%. The share of apartments available under the standard preferential mortgage decreased from 74% to 70%. Less than half of the available housing on the market is available under the program in Kazan, Nizhny Novgorod and Moscow. Three years ago, with the same limits and down payment, the minimum share of suitable properties was in Moscow (73%).
The average amount of a transaction on a preferential mortgage in all cities amounted to 5.53 million rubles, with an average apartment area of 42.6 square meters. m. At the start of the program, the average cost of housing was 3.2 million with an average area of 46.2 square meters. m. That is, the budget increased by 72% while reducing the area by 8%.
Accordingly, the minimum down payment on average for all cities increased by 30%, from 640 thousand to 830 thousand rubles. And the monthly payment with a loan term of 30 years from 2020 to 2023 more than doubled on average — from 16.2 thousand rubles to 34.5 thousand.
For three years of preferential mortgage, the share of affordable housing under the program has decreased from 77 to 70%, and the average cost per square meter has increased by 82%
The rise in prices during the period of the preferential program was uneven. From April 2020 to April 2021, the increase was 32%, from April 2021 to April 2022 — 32.8%, from April 2022 to April 2023 — 3.9%.
For three years, there were several stages of adaptation of the initial version of the preferential mortgage to market conditions, but, despite this, the possibility of using this instrument has decreased. The share of mortgage transactions in the capital region during this time increased from 59 to 78%, the market today is extremely dependent on lending conditions— notes the head of Cyan.Analysts Alexei Popov.
According to the expert, in the last year, mortgages with so-called zero rates acted as an alternative to the standard state-supported mortgage. Also gaining popularity against the backdrop of higher mortgage prices and programs aimed at supporting certain categories of borrowers.
Even despite rising prices, the subsidy program enabled record sales in the primary market (+18% in 2021), as well as a quick transition from a market decline to its recovery in the spring of 2022. The disappearance of zero mortgages did not lead to a significant decrease in demand in the market: in Q1 2023, the number of transactions turned out to be comparable to sales in Q3–Q4 2022, when the rate on issued mortgages was significantly lowerthe expert concluded.
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