CrimeaPRESS reports:
The share of market mortgages in issuances has fallen by almost half in recent months — to 40-50%, they reported Izvestia in DOM.RF. Before that it was 70–80%. The Central Bank confirmed the trend. Due to rising rates, housing loans without government support have become virtually unaffordable. As a result, demand has shifted towards preferential programs, market participants reported. A bias towards subsidized conditions will lead to a deviation of prices on the primary market from market prices and an inflated cost of apartments, experts fear.
Indicators down
The share of mortgages issued under market programs gradually decreased after the key rate was raised in August: now it is no more than 40–50%, Mikhail Goldberg, head of the analytical center DOM.RF, told Izvestia. We are talking about transactions in both the primary and secondary markets, the development institute clarified. They added: the figure of 70–80% has been recorded for the last 1–1.5 years.
Mortgage issuances have accelerated sharply since June. The main reasons are excessive demand against the background of the weakening ruble and a further increase in the key rate of the Central Bank, explains Mikhail Goldberg. People sought to save their savings from depreciation, and also have time to take out loans on better terms.
If in June-July, on average, about 170 thousand housing loans were issued for 630–650 billion rubles, then in August, issuances increased significantly. According to DOM.RF, banks provided about 220 thousand loans worth 850–900 billion. The last month of the summer of 2023 became a record in the entire history of mortgage lending in Russia since 2005, stated Mikhail Goldberg.
REFERENCE «IZVESTIYA»
There are several programs with state support in Russia. The most popular is mortgages for new buildings at 8% (valid until July 1, 2024). Also in the Russian Federation there is a family mortgage at 6%. It can be issued for the purchase of housing in a new building or a house with land. The Far Eastern program provides a housing loan at 2% for clients under 35 years of age for real estate in the Far Eastern Federal District. There are also special offers for employees of accredited IT companies — under certain conditions they can apply for a loan of up to 5%.
In September, increased demand continues, the head of the analytical center DOM.RF emphasized. In addition, from the 20th the down payment will have to be 20%, so Russians are trying to get a loan before this moment. At the same time, the share of issuances based on market offers is decreasing, the expert added.
Large banks confirmed the trend to Izvestia. Against the backdrop of rising mortgage rates in the market at the end of summer, a shift in demand towards programs with government support was recorded, VTB said. At the end of August, they accounted for 54% of the total volume of loans, and by mid-September this figure already accounted for more than 64% (that is, market loans accounted for only 36%). Demand for subsidized mortgages has remained record high since the beginning of autumn, VTB emphasized.
At the end of August, the share of market programs in the total volume of loans in monetary terms was 59%, Rosbank Dom reported. And for 19 days of September this figure was already 49%. At the same time, the demand for mortgages with a subsidized rate is growing, the organization indicated.
The share of distributions under preferential programs in August was 48.2%, which broke the previous record of April 2022 (48%). In June of this year it was 37.2%, in July — 42.1%. Last summer the figure fluctuated between 28–30%, — shared in Sberbank.
The bank emphasized that in total, more than 145.9 thousand loans were issued in August — the highest figure in the entire history of observations.
Crimean RNKB notes stable demand for mortgages on the peninsula, the bank said. The volume of issuances in January–August of this year is comparable to the figures for 2022, UBRD reported. At the same time, over the year, the volume of preferential programs in the overall structure of loans increased significantly — from 25 to 41%, they added (that is, market conditions began to account for 59% instead of 75%).
Absolut Bank noted that in the summer there was greater demand for secondary housing, but in September the share of lending will shift towards government programs.
The Central Bank confirmed to Izvestia a decrease in the share of market mortgages. By August of this year, this figure is 40%. While at the end of 2021 it was 77%. This trend reflects that banks’ offers are losing competition to large-scale preferential programs, the regulator believes. They added that it is for loans with state support that credit institutions offer additional bonuses that attract buyers.
The Ministry of Finance has already expressed concern about the high share of preferential mortgages. In the primary market it accounts for about 80–90%, but this figure should be reduced to 50%, Ivan Chebeskov, director of the department’s financial policy department, told Izvestia. According to him, large budget funds are spent on housing programs, so you need to understand how effective they are and how they work together. Izvestia sent a request to the Ministry of Finance.
Little comfort
After the key increase in recent months, rates on market mortgage programs increased to an average of 14–15%. This level is uncomfortable for borrowers, and the cost per square meter has almost doubled since the spring of 2020, making the purchase of housing even more unattainable, noted Irina Nosova, senior director of the ACRA group of financial institution ratings. However, one should not expect a significant correction, she is sure.
Slowing down the pace of issuing housing loans will improve the quality of banks’ portfolios, added Dmitry Safronov, head of the Mortgage department at the Compare company. But the downside is the slow development of the industry, which will ultimately affect economic growth.
Taking into account the key rate forecast for next year at 11.5–12.5%, we understand that the decline in this segment could be very large. A market rate of around 14–15% is not very comfortable for borrowers, and this situation, apparently, may last for quite a long time, — Mikhail Goldberg from DOM.RF is sure.
According to Irina Nosova’s estimates, all other things being equal, in October-November 2023 the share of mortgages under market programs may decrease further — to 25-30%.
Considering the regulator’s plans to maintain the current value of the key rate for a long time, it should be expected that the share of preferential programs will remain at a high level, emphasized Mikhail Doronkin, managing director of the NKR rating agency. Tightening monetary policy can only increase interest in them. According to the expert, this creates the preconditions for further deviation of prices on the primary market from market prices and inflating the cost of collateral, that is, apartments.
source: News
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