Many Russians will consider the changes unacceptable: square meters will rise in price
The state program of preferential mortgages is likely to be extended until July 1, 2022. Judging by the leaks from the corridors of power, this may become one of the pre-election “gifts” to the population. But at the same time, banks will issue housing loans to individuals on much more stringent conditions, which will seem unacceptable to many. According to experts interviewed by “MK”, in its current form, the program not only continues to inflate real estate prices, but also leads to a rapid increase in the aggregate debt burden of Russians on mortgage loans.
The issue of the extension was discussed at a meeting with the president with members of the government at the end of May, sources in the financial market said. According to them, the most likely option is that the rate of preferential mortgages will increase by 0.5 percentage points (up to 7%), and most importantly, the credit limit will be cut to 3 million rubles for all regions. What can you buy with this money, except for budget housing, a small “odnushka”? Now the limit for the program is 12 million rubles in Moscow and the Moscow region, St. Petersburg and the Leningrad region, and 6 million rubles – in other constituent entities of the Russian Federation.
The preferential mortgage program for new buildings at a rate of up to 6.5% per annum was launched in April 2020 and was to be completed by November 1. Subsequently, it was extended until July 1, 2021. According to the president, she not only helped 1.7 million families (400 thousand more than in 2019) to buy new housing, but also supported the construction industry. You can’t argue with that. At the same time, in April of this year, against the background of the rush demand for housing loans, the total mortgage debt of Russians exceeded 10 trillion rubles. This is an absolute record for the country. Moreover, the demand increased in parallel with the rise in apartment prices.
“The result of the introduction of preferential mortgages is ambiguous. On the one hand, the program has become a help for the construction sector, which has almost reached a pandemic level in terms of real estate commissioning. Thanks to her, many people finally managed to solve the housing problem. Moreover, in the regions, which is especially important, says Nikita Maslennikov, a leading expert at the Institute of Contemporary Development. “At the same time, the cons and negative consequences are no less significant.”
According to Rosstat, the interlocutor of MK notes, only in the period from January to April 2021, apartment prices on average in Russia increased by 17.6%, and by the end of 2020 – by 20%. By the way, accelerated inflation also contributed to this. That is, people took a preferential mortgage, hoping to acquire a very definite number of square meters of living space they needed, but in fact it turned out less.
Another point: the annual growth of the mortgage portfolio as of April 1 of this year amounted to 23.4%, which partly contributed to the increase in the total debt burden of the population (the ratio of all mandatory payments to income) to 11.9% and inflating a bubble in the consumer lending market. Since something needs to be done about this bubble, the Central Bank began to tighten potential supervisory requirements for banks. For example, since July 1, the “anti-crisis” scale of markups to risk ratios for consumer loans has been canceled, the expert recalls. It will be unprofitable for banks to lend to debt-laden citizens.
So, Maslennikov sums up, the program will be formally extended, but the conditions for it will turn out to be unacceptable for many. But if you reset it now, the construction sector is threatened, if not a complete lockdown, then stagnation. In addition, the situation with inflation, with the dynamics of the population’s debt load, with the Central Bank rate, which also affects the mortgage lending market, remains uncertain.
“At the end of 2020, the volume of housing loans issued broke a historical record – more than 4 trillion rubles, while more than half of the loans were issued under a preferential program,” says Artem Deev, head of the analytical department at AMarkets. – But the rush demand for real estate led to the fact that Russia took the 9th place in the world in terms of the growth rate of apartment prices, overtaking the UK. Today, market participants do not expect a repeat of the situation: in conditions of falling real incomes, people cannot endlessly acquire housing. Probably, the program will continue to operate only in certain regions of the country ”.
There is almost no doubt that the preferential mortgage will be extended, although it will be less attractive, says Anna Bodrova, senior analyst at IAC Alpari. “The increased demand for housing in the current economic environment is not bad. Firstly, the square meters under construction must be sold, secondly, they remain a good tool to protect money from depreciation, and thirdly, cities are expanding at the expense of the outskirts, where the most dynamic construction is taking place and the infrastructure is improving, “the analyst believes.
Preferential mortgage without benefits