Experts: issuance of preferential mortgages jumped in May

How much did the issuance of preferential mortgages increase in May?

In May, banks issued 77 thousand preferential mortgage loans worth 412 billion rubles. This is more than in April, by 16% and 17%, respectively, according to data from DOM.RF (Izvestia studied them). At the same time, the growth rate of housing lending more than doubled. If we compare April with March, the volume of soft loans increased by only 7%.

Compared to the previous year, the growth is also significant. The issuance of mortgages with state support in May exceeded the figures for the same period in 2023 by a third, according to DOM.RF data. The number of issued loans increased by 21% over the same period.

The largest banks confirmed to Izvestia an increase in issuances under state programs. In May 2024, Sber issued preferential loans worth more than 218 billion rubles (more than half of all issuances in the Russian Federation for the same period). This exceeds the previous month’s figures by 60%, the press service of the financial institution reported.

Bank «DOM.RF» issued 20% more housing loans with state support in May than in the same period last year, said vice president of the organization Kirill Varentsov.

Nevertheless, for some market players, the indicators for May were comparable to those in April, as reported by representatives of VTB and Absolut Bank. In any case, this indicates high demand for mortgages, since traditionally, due to the May holidays, lending volumes are reduced this month, said Vitaly Kostyukevich, director of the retail business department of Absolut Bank.

Many borrowers are trying to “jump on the last train,” that is, take out a preferential mortgage before it is canceled yet, — noted Freedom Finance Global leading analyst Natalya Milchakova.

The preferential program for new buildings at 8% is valid until July 1, 2024. As Deputy Finance Minister Ivan Chebeskov told Izvestia, it will not be extended — this is a consensus. Also, after this date, the conditions for mortgages for families with children at 6% may change — the Ministry of Finance admitted that they could raise the rate for families with children over 6 years old.

Until the end of 2024, a special program for IT specialists at 5% continues to operate in Russia, and Far Eastern and Arctic mortgages at 2% have been extended until 2030.

At the same time, by the beginning of June, banks had spent 95% of the total limit of funds for issuing loans under the program for new buildings — out of 6.19 trillion rubles, 5.89 trillion rubles were used, DOM.RF clarified. That is, before it ends, banks will be able to issue loans for new buildings at 8% for approximately 300 billion rubles — the organization is confident that by July 1, lenders’ limits will completely run out. Izvestia sent inquiries to the Ministry of Finance and the Central Bank of the Russian Federation.

Banks are trying to issue the maximum volume of preferential mortgage loans under government programs that will be reformed or canceled,” added independent expert Andrei Barkhota.

Lending organizations have confirmed the high level of mortgage approval. Clients who take out housing loans traditionally show the highest payment discipline, noted the VTB press service.

Banks are interested in getting the maximum number of solvent and decent borrowers from this rush, and not just issuing as many loans as possible under the state program, added the author of the Economism project and real estate market expert Alexey Krichevsky. Because of this, the mortgage refusal rate in June could skyrocket to 70–80%.

How the situation on the real estate market will develop in the second half of 2024

The likelihood of a new increase in the Central Bank’s key rate this summer (from the current 16%) further fuels the demand for preferential programs against the backdrop of their adjustments, noted Natalya Milchakova from Freedom Finance Global. Russians will strive to take out cheaper housing loans while it is still possible.

The anticipation of the completion of a preferential mortgage at the moment stimulates increased demand for it. This rush is likely to intensify in June.expects BCS World of Investments stock market expert Lyudmila Rokotyanskaya.

For the housing market, the rush demand in May and June will mean that new buildings will continue to rise in price, added Natalya Milchakova.

Already in the second half of the year, we can expect a slowdown in mortgage lending,” warned Lyudmila Rokotyanskaya.

To support sagging sales, developers will use new and old marketing tools — promotions, discounts and installment plans, said Oleg Repchenko, head of the analytical center Real Estate Market Indicators IRN.RU. However, developers will not be able to avoid a significant decline in sales — people simply will not be able to buy housing with a mortgage at a rate of 17–18%. Therefore, developers will have to move to a gradual systematic reduction in prices, the expert concluded.

However, the real estate market reacts to changes in external factors with a delay, so after July 1, an instant collapse in prices for new buildings will not occur, Natalya Milchakova clarified. The cost of housing by the end of 2024 will decrease by 5–10% in all regions except Moscow and St. Petersburg, where prices may stagnate.

The cooling period of the real estate market may last 9–15 months, says Andrei Barkhota. The volume of newly issued loans in the second half of the year will decrease by 15–25% (relative to the second half of 2023). In addition, developers will be slower to launch and complete new projects, the expert concluded.

source: «News»