Opinion: what will happen to the mortgage and real estate market when the preferential program ends

From July 1, 2024, remind Banki.ru, banks will stop issuing preferential mortgages at 8% per annum. Let’s figure out what will happen to the real estate market after this.

Features of the program

Preferential mortgages made it possible for all adult citizens of the Russian Federation to purchase housing from the developer at a reduced rate. It was possible to buy both an apartment and a house, including a plot of land for its construction.

Under the preferential program, it was possible to receive up to 6 million rubles with an initial payment of up to 30%. The mortgage term is up to 30 years.

Why are preferential mortgages being cancelled?

Preferential mortgages were introduced in 2020 and were constantly extended. Over four years, this program has increased the demand for new buildings and, consequently, their prices. As stated in the Central Bank’s financial stability review, the termination of preferential mortgages and adjustments to the conditions of other preferential programs may lead to a temporary reduction in demand for housing and stabilization of prices. This will help gradually reduce the imbalance between the primary and secondary markets.

How cancellation of the program will affect the mortgage market

As Banki.ru analyst Inna Soldatenkova says, the weight of preferential lending after the termination of the preferential program will significantly decrease. Changes in the terms and conditions of family mortgages will also affect the market—we’ll tell you later how they can be adjusted.

The abolition of preferential mortgages will slow down the growth of prices for primary housing. There will also be a redistribution of demand for the secondary market and individual housing construction, says Inna Soldatenkova. — However, the issuance of mortgages for secondary housing will be limited by high rates, which will remain at this level in the near future.

Is it worth taking out a mortgage?

According to Banki.ru analyst Inna Soldatenkova, applying for a preferential mortgage does not always allow you to save money — in most cases, loans with state support apply to primary housing, the cost of which in the last two years exceeded the cost of secondary housing.

Also, when deciding to apply for a mortgage, Inna Soldatenkova recommends starting from:

— cost of housing;
— expected monthly payment amount;
— your financial capabilities.

In the second half of the year, it will become more difficult to get a mortgage — this will be influenced by high rates on basic bank programs and tightening regulation. Borrowers who already have loans and/or mortgages will face difficulties, since banks will pay close attention to the debt load indicator. If it exceeds 50%, the mortgage will most likely be deniednotes the analyst.

You can calculate your comfortable monthly payment using a mortgage calculator.

How cancellation of the program will affect prices

As noted by the founder of the management company Smarent, Viktor Zubik, the abolition of the preferential mortgage program will most likely lead to a decrease in demand for new buildings. Prices are also expected to decline in the secondary market, as more people will choose more affordable housing options.

If you are planning a long-term stay, then buying an apartment now can be profitable. Especially considering that new buildings are being built in promising areas, where infrastructure development in the future will increase the demand and cost of housing, says the expert. — For investment, buying can be risky, as short-term price fluctuations after the cancellation of the preferential program may lead to the fact that you will not be able to sell the apartment at the desired price in the near future.

Also, according to the expert, the summer of 2024 is not the best time to sell an apartment due to uncertainty in the market and a possible decrease in demand.

What are the alternatives?

There are other government programs on the market that you can take advantage of if you meet the requirements.

IT mortgage

This program is available to employees of IT companies accredited by the Ministry of Digital Development.

— Rate: up to 5% per annum.

— Maximum amount: in regions with a population of less than 1 million people — 9 million rubles, and in cities with a population of over a million — 18 million rubles.

— Down payment: from 20%.

— Duration: up to 30 years.

Under the terms of the program, borrowers aged 36 to 50 years must have a salary of:

— From 150 thousand rubles in Moscow.
— From 120 thousand rubles in cities with a population of over a million.
— From 70 thousand rubles in other cases.

Family mortgage

It will also be canceled from July 1, 2024, but after that a new family mortgage will be in effect, which is planned to be extended until 2030. Until July 1, the following conditions apply:

— Rate: up to 6% per annum.

— Maximum amount: 12 million rubles for the purchase of housing in Moscow, St. Petersburg, Moscow and Leningrad regions and 6 million rubles in other regions.

— Down payment: from 20%.

— Duration: up to 30 years.

Mortgages are available to families with children, including adopted children. You can buy housing in a new building. A secondary building is also suitable if it is located in a rural area of ​​the Far Eastern Federal District.

The full terms and conditions that will apply after July 1 have not yet been announced. However, there are preconditions that are being discussed:

— Families with children under 6 years old will be able to get a mortgage at 6%.

— For families with two minor children over 6 years old, a rate of 12% is considered.

— The option of linking the family mortgage benefit to the number of children in the family is also being considered.

Rural mortgage

Suitable for those who plan to take out a mortgage to purchase or build real estate in rural areas.

— Rate: up to 3% per annum.
— Amount: up to 6 million rubles.
— Down payment: from 20%.
— Duration: up to 25 years.

What kind of real estate can you buy:

— An apartment in a new building up to five floors.

— An apartment on the secondary market in a building no older than 5 years if the seller is an individual, or no older than 3 years if a legal entity/individual entrepreneur.

— House or plot for construction.

Far Eastern and Arctic mortgage

Suitable for those who want to buy housing in the Far East or in the Arctic zone. The conditions for these two programs are the same:

— Rate: up to 2% per annum.
— Amount: up to 9 million rubles when purchasing housing with an area of ​​more than 60 m².
— Down payment: from 20%.
— Duration: up to 20 years.

What other changes are planned in the market?

Another change from July 1, 2024 is the introduction of macroprudential limits on mortgages. This measure is needed to limit lending to borrowers with a high debt burden ratio (PDL). Namely, the Central Bank limits the percentage of loans issued to borrowers whose load is above 50%.

According to Banki.ru analyst Inna Soldatenkova, this will lead to an increase in the percentage of refusals on loan products for borrowers with a high personal income tax. However, new mortgage programs may also appear in the near future, under which it will be possible to borrow money on preferential terms. Let’s sort them out.

— Green mortgage. This is a mortgage with a reduced rate for the construction or purchase of environmentally friendly housing.

— Mortgage for individual housing construction. Individual housing construction is individual housing construction. The authorities are developing a new preferential program specifically for individual housing construction due to growing demand. If it is introduced, it will be possible to take money for the purchase or construction of a private house at a rate below the market rate.

source: Banki.ru