President Vladimir Putin’s proposal to extend the preferential mortgage program for a year with tougher conditions is a balanced one and will lead to a cooling of the housing market. This was announced at a press conference by the head of the Bank of Russia Elvira Nabiullina.
“This will lead, of course, on the one hand, to the fact that the effect on prices, on the rush demand will be less, there will be some cooling. This means an exit from the program, which was considered as anti-crisis. In our opinion, I will repeat once again as an anti-crisis the preferential mortgage program was very, very effective, but it is necessary to leave it gradually and on time, “Nabiullina emphasized. At the same time, the exit from it, according to the head of the Central Bank, should not be abrupt, so as not to provoke sharp changes in demand, which is already “a little overheated.”
According to Nabiullina, a decrease in the maximum amount of a home loan under the state program will reduce the rush demand for mortgages in the largest cities of the country. “And the increase in the preferential rate to 7%, nevertheless, will bring the rate closer to the market level, which is also very important. And it is also important in this decision that targeted support measures for young families will be expanded, and this will also allow supporting the mortgage market.” , – says Nabiullina.
At the same time, the head of the Central Bank stressed that the regulator will closely monitor the quality of mortgage loans and lending standards. “As necessary, if necessary, we will apply macroprudential regulation measures to ensure that the quality of loans is appropriate and the debt burden of people does not grow uncontrollably,” Nabiullina said.
Last week at the St. Petersburg International Economic Forum, President Vladimir Putin announced that the current concessional mortgage program in new buildings with a state subsidized rate, which was supposed to end on July 1, 2021, will last until July 1, 2022 in all Russian regions. At the same time, the program will be changed: the subsidized rate will increase from 6.5% to 7%, and the credit limit that can be taken at such an interest will decrease to 3 million rubles (from the current 12 million rubles for Moscow and the Moscow region, St. and the Leningrad region, as well as from 6 million rubles for other regions). In addition, the family mortgage program is expanding at 6%: all families with children born after January 1, 2018 will be able to apply for a home loan with such a rate, even if they have only one child.