CrimeaPRESS reports:
Before the end of the preferential mortgage program, Russians took out a record number of housing loans, according to statistics from the United Credit Bureau. In May, they accounted for 75% of all mortgage loans issued. Data for June is not yet available.
On the sidelines of SPIEF-2024, DOM.RF CEO Vitaly Mutko said that during the implementation of preferential mortgage programs, Russian banks issued 2.7 million loans to the population for 11.6 trillion rubles. According to him, more than 1.5 million loans for over 5.8 trillion rubles were issued separately under the preferential mortgage program for new buildings during its operation.
Under the Family Mortgage program (at 5-6%), Russians received more than 1 million loans for almost 4.7 trillion rubles. Mutko added that under the Far Eastern and Arctic Mortgage program (2-6%), banks provided the population with 110.2 thousand loans for 502.3 billion rubles. Under the IT Mortgage program (at 5%), 68.4 thousand mortgage loans were issued for 612 billion rubles.
What will happen next
The family mortgage at 6% will be extended until 2030, but it will become as targeted as possible, for example, the purchase of studios and small apartments may be excluded from this program. IT mortgages are still in effect until the end of 2024, and programs are in effect for residents of certain regions of the country— Epifanova clarified.
Mikhail Goldberg, head of the DOM.RF analytical center, told Gazeta.Ru that the “preferential mortgage” was launched as an anti-crisis measure, and the implementation of the mass mortgage program made it possible to support the construction industry during the difficult period at the beginning of the decade.
As a result, by the end of 2023, it was possible to reach peak values both in terms of demand for new buildings and in terms of housing construction volumes. In the future, rates under state programs will remain low in order to maintain demand primarily in those regions where housing construction volumes were previously small.he noted.
Economist and communications director at BitRiver Andrey Loboda did not rule out that when interest rates on market mortgages are low again (currently reaching 17.5% — Gazeta.Ru), the state may again review some of the preferential mortgage programs. But the expert does not expect any fundamental changes in the terms of state programs in the near future.
Interest rates on commercial mortgages do not depend on preferential programs. They depend on the key rate of the Central Bank. If the key rate is raised in July, then interest rates on loans will increase. And this will continue until the Central Bank of the Russian Federation begins to lower the key rate.Loboda clarified.
Goldberg admitted that the Central Bank will begin to reduce the key rate in 2025. According to forecasts by Mikhail Vasiliev, chief analyst at Sovcombank, the key rate will be 10% by the end of next year.
What will happen to the demand for mortgages?
According to Goldberg, mortgage issuance will predictably continue to decline until the end of 2024, both due to the winding down of the Preferential Mortgage program and due to a prolonged period of high rates on market mortgages:
In this regard, we forecast a general decrease in issuance by 35-40% to 1.3-1.4 million loans for approximately 5 trillion rubles in total for the year. At the same time, the decrease in the second half of the year will be more significant.
The VTB press service added that the largest reduction in sales will occur in July-August: on average by a quarter compared to June, while over the past 15 years, issuances have grown month-on-month by an average of 3%. By the end of 2024, VTB expects market sales at the level of 5.3-5.4 trillion rubles (in 2023 — 7.8 trillion rubles).
What will happen to housing prices?
VTB reported that over the 4.5 years of preferential mortgages, real estate market participants have accumulated a certain financial “cushion”: in a number of cases, the increase in apartment prices has significantly outpaced the cost price.
In the new conditions, given the weakening of customer demand, these opportunities will narrow, and the growth of the cost per square meter may slow down. But this will happen, rather, due to the desire of developers to maintain prices at the previous level, slowing the release of new projects and providing targeted discounts.— the press service noted. They added that developers will be waiting for the onset of a period when sales will be stimulated not by preferential, but by regular mortgages. Goldberg does not expect housing prices to fall after July 1. According to the expert’s forecast, the cost per square meter will grow within the inflation rate, but in a number of regions the growth will be lower than inflation. Olga Panina, PhD in Economics and Associate Professor of the Department of Public and Municipal Administration at the Financial University under the Government of the Russian Federation, admitted that there could only be a temporary decrease in housing prices after the cancellation of preferential mortgages: Since the supply on the housing market is limited, a sharp drop in prices is not expected, but a decrease in demand may lead to a temporary slight decrease in prices, especially on the secondary market. Ekaterina Podolskaya, a lecturer at the Department of Economics and Finance at the branch of the Presidential Academy in St. Petersburg, admitted that the cost of housing on the primary market could approach the cost of properties on the secondary market — today the difference between them is up to 20% or more. Goldberg believes that sufficient volumes of housing sales will be supported by the extended Family Mortgage, and in the medium term, as the key rate decreases, the share of market programs will begin to increase again: The good news is that, against the backdrop of the expected decline in demand, prices for new buildings, as we have already said, will freeze, and the secondary market will begin to decline. At the current level of wage growth, this will lead to an increase in the overall affordability of housing. However, VTB does not agree with this and does not see any reason to reduce housing prices. Given the Central Bank’s signal to maintain a high key rate for a long time, after the completion of the universal state program, the availability of mortgages for the population will decrease— the bank’s press service clarified. The bank’s press service added that programs will be developed on the secondary market that reduce the rate for the first few years or the entire term of the contract by making a one-time payment by the client. According to Panina, the situation is now becoming more difficult for those buyers who were planning to buy housing in redit. According to the economist, the demand for renting and purchasing apartments using one’s own funds may increase. Epifanova added that the government is now seriously working on the mechanism of savings and loan banks as an alternative to mortgages, and a corresponding bill is already ready: The principle of operation is simple: a citizen opens a special account and regularly replenishes it, interest is accrued on this money, similar to a bank deposit. When a certain amount is accumulated, the housing is registered as property, and the missing amount can be borrowed from the bank. If the money is not spent on housing, the interest is cancelled. The senator believes that there is nothing critical for Russians now, and there are no reasons for concern: Support instruments are changing, some are leaving, others are appearing. Moreover, at the moment, while the key rate is high, bank deposits seem more profitable for many, additional funds are accumulating, which can be spent on buying housing by the time the rate is reduced. Real estate was, is and remains one of the most popular ways to save and invest money. source: Gazeta.ru
Will Russians be able to buy housing?
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