how the growing demand for preferential mortgages can affect the value of real estate in Russia – RT in Russian


Under the concessional mortgage program at a rate of 6.5% per annum, Russian banks issued 80,000 loans totaling 200 billion rubles. According to experts, the reduction in the cost of housing loans has significantly reduced the costs of Russians to buy apartments. At the same time, the revival of demand in the Russian real estate market accelerated the recovery of the construction industry from the effects of the COVID-19 pandemic. How the cost per square meter in Russia can change under these conditions – in the material RT.

Under the program of concessional housing loans at a rate of 6.5% per annum, Russian banks issued 80,000 mortgage loans worth 200 billion rubles. On Monday, July 20, said the head of the analytical center “DOM.RF” Mikhail Goldberg.

“We see a huge demand for such mortgages. This is especially important now, when, after a long period of self-isolation, citizens have accumulated pent-up demand for new housing, and developers need to increase sales to return to planned schedules for financing construction projects, ”Goldberg said in an interview with

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Recall that the authorities launched a program of preferential mortgages back in April 2020 as part of supporting Russians in the context of the COVID-19 pandemic. Initially, citizens were granted mortgages with a corresponding rate of up to 3 million rubles, and in Moscow, Moscow Region, St. Petersburg and the Leningrad Region – up to 8 million rubles. Meanwhile, on June 23, Vladimir Putin announced the expansion of this program.

“I propose to extend preferential mortgages to new housing costing not up to three, as before, but up to six million rubles, and in the largest metropolitan areas – Moscow, St. Petersburg – up to 12 million rubles,” the president said during an address to citizens.

Russians can get a loan at a reduced rate until November 1, 2020. According to DOM.RF estimates, since the start of the program, banks have already received more than 325 thousand applications from clients, of which more than 216 thousand have been approved. At the same time, in the period from May to June, subsidized loans accounted for almost 70% of the total number of issued in the country of mortgage loans.

“Many families have received affordable mortgages with an acceptable monthly payment and minimal overpayment. At the same time, there has been an upsurge in the construction industry due to the influx of new buyers, which allowed the industry to mitigate the fall from downtime during self-isolation, “said Yegor Dakhtler, an analyst at the Investment Ideas Factory, BKS, in a conversation with RT.

As a result of the coronavirus pandemic in April, the volume of housing loans issued in Russia collapsed by almost 40%, but thanks to the decisions made to help the industry in the first half of 2020, the figure exceeded last year’s level by 5%. Deputy Prime Minister Marat Khusnullin announced this earlier during a meeting with the President. According to RT experts surveyed, the launch of the preferential mortgage program has significantly accelerated the recovery of consumer demand for real estate.

“Against the background of cheaper loans, demand for housing may grow by 10-15% by the end of 2020. An additional impact on the restoration of purchasing power can be provided by the introduction of new programs for project financing in the construction industry, as well as a decrease in interest rates on loans, including in the secondary market, ”said Konstantin Aprelev, vice president of the Russian Guild of Realtors, to RT.

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As a result of the launch of the preferential mortgage program at the end of May 2020, the average rate on housing loans in Russia dropped to the lowest level for the entire observation period – 7.4% per annum. This is evidenced by the materials of the Central Bank.

According to analysts, the further reduction in the cost of loans for housing in the country will largely depend on the policy of the Bank of Russia itself. Traditionally, financial institutions monitor changes in the key rate of the Central Bank and, on the basis of decisions made by the regulator, independently determine the level of long-term lending rates, including mortgage rates.

At a meeting in June, the Central Bank cut its key rate to 4.5% per annum. The value became the lowest for the entire post-Soviet period. At the same time, on July 24, the regulator may again reduce the value, says Anna Bodrova, senior analyst at the Alpari information and analytical center. According to her, by the end of the year, the actions of the Central Bank may lead to a drop in the average mortgage rate in Russia to 6.5% per annum.

“Reducing the cost of a mortgage loan even by 1-1.5% per annum will significantly reduce the costs of families to pay off the loan. In turn, for banks it is a good opportunity to build up a client base, ”Bodrova added in a conversation with RT.

According to experts, the observed decrease in mortgage rates may affect the value of real estate in Russia. According to RT, the head of the analytical department of AMarkets, Artyom Deev, as a result of the recovery in demand for apartments, realtors have already begun to raise prices for some objects in major cities of the country. At the same time, there is still an oversupply on the Russian real estate market, so the analyst does not expect a noticeable rise in price per square meter.

“After the abolition of quarantine measures, the cost of housing in Moscow and St. Petersburg increased by 5-7%, which was largely due to pent-up demand. Also, sellers played on the growing interest of Russians in preferential mortgages. However, in the fall, the price of housing may drop by 3-5% in large cities and by 6-8% in the regions, ”concluded Deev.

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