Experts told us what changes are expected in the mortgage market and how increasing rates will affect apartment prices
Experts’ forecasts after the Central Bank’s September increase in the key rate began to come true. Credit organizations issuing mortgages began to increase loan rates.
Market participants explained how other mortgage banks might behave, what changes they expect in the mortgage market, and how what is happening will affect housing prices.
“Due to rising mortgage rates, demand for housing will decrease”
Maria Litinetskaya, managing partner of Metrium:
— We should not expect a resumption of rate cuts yet. In 2019, due to the VAT increase, inflation will increase, which the Central Bank will begin to fight by increasing the key rate. Other factors (say, sanctions) will also push the authorities to tighten monetary policy. In this situation, an acceptable (but, of course, not the best) possible scenario would be to maintain loan rates at the current level or to increase them very slowly.
Now we will observe the inertia of demand. Not all families who were satisfied with the 9-10% interest rate had the funds for a down payment to quickly respond to a decrease in the cost of the loan. Now they are “pulling up reserves” in order to get a loan in time, and as soon as such buyers implement this plan, demand will gradually begin to decline.
Rising mortgage rates will gradually begin to slow down purchasing activity, which is precisely what Lately allowed developers to pursue a more confident pricing policy. Since the beginning of the year, mass primary housing in the capital has risen in price by almost 5% - after three years of declining prices. However, you need to understand that, in addition to demand, prices are influenced by other factors not related to the mortgage. The already mentioned VAT increase will force developers to increase prices by at least 2.5-3%. The rise in the cost of loans for housing construction in the context of the industry's transition to project financing will also lead to an increase in prices. In general, we can say that housing will become less affordable.
“Prices in new buildings will rise, but not because of rising rates”
Irina Dobrokhotova, Chairman of the Board of Directors of the Best-Novostroy company:
— To the Central Bank’s statement about increasing the key rate, which the regulator made on September 14, 2018, the banks responded immediately. And this is quite natural, since banks take out loans from the Central Bank and resell them to their clients, earning a margin on the difference in rates. However, the 0.25% increase in the key rate is not critical; in fact, the rate has returned to the spring 2018 value. And although a number of banks have raised rates by 0.5 and even 1%, this increase cannot make mortgage loans unaffordable. You can take out a mortgage without fear, especially since in the primary market most developers and banks create comfortable conditions for purchasing real estate and their joint programs allow you to take out a mortgage from 6% per annum.
We also predict an increase in prices in new buildings, but not due to an increase in mortgage rates, but in connection with amendments to 214-FZ and the transition to escrow accounts, which will lead to an increase in the cost of new projects. However, these changes should only be expected in 2019. In the meantime, we see no reason to reduce purchasing activity, including on the part of mortgage borrowers.
“Banks will decide to raise rates within two weeks”
Svetlana Volskaya, head of the sales department of the office “On Kievskaya” of the Miel-Network of Real Estate Offices company:
— We expect rates to rise from many banks. Some of them immediately responded to the increase, others will decide to increase their own mortgage rates over the next two weeks. There is a possibility that the growth will be approximately 1.5%. Most likely, some banks will decide on a one-time rate increase, taking into account possible subsequent increases in the key rate by the Central Bank. Other banks will prefer to monitor the actions of the Central Bank, adjusting the mortgage rate to the amount that the Central Bank will announce. Despite the increase in mortgage rates, there are no real economic prerequisites for an increase in apartment prices yet. Therefore, we do not expect a significant correction in prices on the secondary housing market until the New Year.
“The mortgage market remains calm and stable”
Alena Deryabina, General Director of Don-Stroy Invest:
— It is premature to talk about the rise in mortgage rates as a long-term trend. DOM.RF itself assesses the rate increase as a temporary measure; in general, calm and stability remain in the mortgage lending market. A small increase in rates is unlikely to have a critical impact on demand: rates of up to 10% per annum remain an acceptable level for most buyers. Developers today are not limited to basic mortgage programs and are trying to offer clients the most diverse purchase options. For example, subsidized mortgage programs that are developed jointly with banks for specific projects. In general, mortgages for last years has become an effective sales tool in all real estate segments, and today we do not see any prerequisites for any drastic changes.
“Price growth is hampered by declining household incomes”
Olga Shikhova, head of the mortgage department at the Bon Ton real estate agency:
“We are seeing a situation where rates are being brought to a certain level that corresponds to the capabilities of banks. The expected increase, that is, after the key rate is revised, averages 0.25-0.5%. At the same time, the most attractive mortgage programs provide for minimum rates of 8.5-9%, that is, the sensitivity threshold is still far away.
We do not expect significant price fluctuations in the short term - it is not advisable for developers to change these conditions, given the huge volumes of housing being sold and the fairly high pace of new projects going on sale. Construction permits issued since the beginning of 2018 are estimated at approximately 3.8 million square meters. m, and this is for Moscow without taking into account the region and volumes provided for as part of the renovation. At the same time, the situation with mortgage rates also impedes price growth, as does the decline in household incomes, which has been observed over the past few years - in order not to lose effective demand, developers will pursue a careful policy in implementing their projects.
“The Central Bank swayed for a long time, the key rate could have risen earlier”
Sergey Shloma, director of the secondary market department at Inkom-Real Estate:
“We predicted an increase in the Central Bank’s key rate and, following it, mortgage rates; we even assumed that the bank would do this even earlier in order to stabilize the current economic situation in the face of the falling ruble exchange rate. At the same time, the Central Bank, in our opinion, swayed for a long time, but, be that as it may, with its decision it provided psychological support to the market and thereby contributed to the strengthening of the ruble, which naturally affected mortgage rates. Anticipating all this, over the past two months we have been warning our clients considering whether to take out a mortgage that if they do not do it now, they will have to take out a loan at a higher interest rate later.
However, so far we have not seen banks begin to massively raise mortgage rates; rather, they are now taking a wait-and-see approach, since 0.25% is still an insignificant change in the key rate for them. The ruble continues to strengthen. And if the next package of sanctions against Russia is not adopted, the key rate may not increase again. If we talk about prices, it all depends on how significant the decrease in mortgage demand turns out to be; only using these figures will it be possible to understand the trend of price correction.
“Buyers will rush to take out a loan now - for more favorable conditions»
Oleg Stupenkov, head of the consulting company TOP Idea:
— News about rising rates may stimulate the growth of transactions. Buyers, of course, are worried, because no one wants to overpay. Many will rush to conclude an agreement on current, more favorable terms. At the same time, the increase in rates has not yet had any effect on the increase or decrease in prices for new buildings, and it is unlikely that developers will decide to reduce prices to attract buyers for this reason. A rate of even 10-11% per annum is quite normal, and 12% per annum too. Of course, if someone managed to get a mortgage at 9%, that’s good, but people will take out loans at a higher rate.
There are still programs to reduce the rate by the developer: when the buyer of an apartment takes out a mortgage at a lower interest rate, and the developer compensates the bank for the remaining 1-3%. But at the same time, such a mortgage is issued for a short period (five to seven years), and the developer is ready to compensate the bank for an amount of 200-300 thousand (in the mass housing segment) and no more than 500-600 thousand rubles. (in business class). Now such offers have already begun to decline, but in some places you can still find them in economy or comfort class. Also, sometimes the banks themselves offer a reduced rate - for example, to salary clients, as well as to those who take out life and health insurance or conduct transactions electronically.
“New programs for subsidizing rates from developers and banks will appear”
Alexey Kharitonov, Sales Director of the Housing Construction, Russia segment of the YIT concern:
— Of course, no one is making official statements, but in September we see an adjustment in rates for a number of banks with which we cooperate, and above all, Raiffeisenbank and Absolut (they have + 0.7%). However, the main market players - Sberbank and VTB - have not yet notified the changes. Let's see, Sberbank has always been a pioneer in reducing rates - and, I hope, will be an outsider in raising them. I think that now on the market we will see more offers of subsidized rates from developers and banks.
I'm sure there won't be a drastic change. Too much work has been done to reduce rates and too many promises have been made to this market in reality. high level— we all remember the 6% goal. As for the period of growth, macroeconomic financial indicators will be decisive, which now, unfortunately, are highly dependent on foreign sanctions policy. But I am optimistic about the future and think that the end of the first quarter of 2019 will determine the trend, which will hopefully be down again. Over the past four years, the rate has decreased by an average of 0.7-0.9% per year, and in the current conditions 0.5% would be good. Nothing new will happen to housing prices in the next six months. Changes to Federal Law 214-FZ and project financing for developers in the second half of 2019 may have a greater impact.
“It is more profitable for the state to support the mortgage market than to increase the problem of defrauded investors”
Alexander Pypin, leading analyst, CIAN:
— By the end of 2018, the average rate for issuing mortgage loans may increase by 0.75% in the secondary market and by 0.25% in the primary market. In 2019, it is possible that rates will return to minimum levels in the primary market - this will happen either due to a stable macroeconomic situation, or due to the regulatory influence of the state, including programs to subsidize mortgage rates. It is more profitable for the state to support the mortgage market than to face an increase in the problem of defrauded equity holders due to a decrease in sales from developers due to a slowdown in the issuance of mortgages in the primary market. The secondary housing market, which lives without government stimulation, will suffer from this configuration, but this also happened in previous waves of the crisis, when lending rates on the secondary market grew significantly more than on the primary market, and began to decline later.
Changes in mortgage rates will not affect the primary market, since growth is expected to be minimal, including due to the fact that the increase in rates will be compensated by developers interested in maintaining the pace of sales, and also to restrain the state by regulating the market. In the secondary market, where there is no government policy, the increase in rates is expected to be more noticeable, which will lead to a decrease in demand and, accordingly, reduce the potential for price growth in the secondary market, which has been observed in Russia over the past year.
“At the first opportunity, market players will reduce rates by at least fractions of percentage points”
Dmitry Tsvetov, Director of Marketing and Product Development, A101 Group of Companies:
— An increase in mortgage rates will not directly affect housing prices. The level of rates is critical for the size of monthly payments, and today this is an incomparably more important indicator of housing affordability for the population. Today, approximately two-thirds of apartments in projects in the affordable price segment are purchased using a mortgage loan, and this is largely due to the development of the mortgage lending market.
The increase in the DOM.RF rate is temporary and, in fact, symbolic, unlikely to seriously affect the size of mortgage payments. At the same time, DOM.RF announced the improvement of other conditions for borrowers, which can be regarded as another sign of overall stability in the mortgage lending market. Other banks may also have to raise rates or continue to raise them gradually in the short term. But, wary of losing clients and their positions in the market, they will look for an opportunity to compensate for this growth, for example, with programs without a down payment or with a floating rate. Everyone understands the long-term perspective: by 2024, according to the decree of the President of the Russian Federation, the mortgage rate should be no higher than 8%. Therefore, at the first opportunity, all market participants, as well as the Central Bank itself, will begin to reduce mortgage rates by at least fractions of percentage points.
“Forecasts of rising rates have caused an increase in consumer demand”
Konstantin Tyulenev, head of retail sales department of Ingrad Group of Companies:
— The volatility of mortgage rates, which the market has observed over the past two or three years, had virtually no impact on the pricing policy of developers. In this case, we can say that prices are affected by changes in demand in a particular project, depending on the location, stage of construction and competitive field. Forecasts of a possible increase in mortgage rates caused a certain increase in demand in August, people tried to fix mortgage conditions, but in September the situation leveled off. I don’t think that an increase in rates by 0.5-1% will have a sharp impact on demand; rather, it may be influenced by price dynamics in developer projects, as well as general market trends caused by changes in industry legislation.
Hello.
I am with you, Dmitry Ovsyannikov.
Questions. But in this case, questions from our YouTube channel:
“Dmitry, hello. Can I have your advice? We want to take out a mortgage this year (Moscow). The down payment is 15%. We can’t decide when to take it: now (spring) or wait until the end of the year? I read that experts are predicting another slight drop in rates by the end of the year.
I'm interested in your opinion."
Well, what can I say about interest rates?
If we look at how rates have changed over a time period of 2 years (the last), we will find that interest rates are falling and the feeling sometimes arises that interest rates can only fall. But that's not true.
And to be convinced of this, it is enough to look at a longer time period, well, for example, a time period of 10 years.
What will we find? That our interest rates changed quite a lot during this time period.
And they not only fell, but also grew.
For example, in 2008, interest rates began to rise, and the rise in rates began around March, which led, as we remember, to a small crisis.
Then, in 2009, banks began cutting interest rates, and the decline (a slight decline at a rate of about half a percentage point per year) continued until about 2013.
Then, in 2013, interest rates slowly but surely began to rise again.
The peak of growth occurred... well, somewhere at the end of 2014, when our wonderful Central Bank raised the key interest rate.
And after this, commercial banks increased interest rates,
(But here, it seems, it is not clear what started first: in my opinion, after all, the banks first began to raise interest rates, and then the Central Bank reacted. And then, commercial banks again reacted to the Central Bank’s reaction).
That is, until 2014 we had an increase in rates. And only starting in 2015, interest rates went down.
That is, when we take out a mortgage loan, this loan is quite long-term, it is taken out for more than one year.
And today the average “lifespan” of a mortgage loan is approximately 10 years.
(For comparison, before 2008, the average “life of a loan” was approximately 5 years).
That is, the “loan life” has increased.
It has become more difficult for people to repay loans.
Well, accordingly, our interest rates can not only rise, but also fall.
And not only fall, but also grow. Just like that.
Moreover, we saw two periods of growth over a time period of 10 years. And I’m not sure that this fall will not lead to further growth, that this fall will not end, and that another period of growth will not begin. It can start at any moment.
Like I said, I don't see economic reasons to reduce interest rates.
And, as I already said six months ago, the reasons for lowering interest rates are most likely political, not economic.
Well, then we look: what will we have in March?
That is, before the elections it makes sense to reduce interest rates. For what? In order for people's thoughts to be directed in a positive direction: rates are reduced - housing becomes more affordable.
But does it make sense (political sense) to lower interest rates after the elections?
I'm not sure about this.
That is, at the end of this year, rates may not fall so much as rise.
At what interest rate do banks currently issue mortgage loans?
Well, the best interest rates are at 9.5% per annum.
A bank attracts money somewhere in order to issue it later.
Attracts at one price, gives out at another.
Typically, the difference between the rate at which a bank attracts money and the rate at which it issues money is 3 percentage points.
What does this money go to?
Well, one percentage point is the bank's profit. A bank is a commercial organization: it works for something.
The second percentage point is transaction costs. To attract money and to issue it (salaries of bank employees, rent of a bank office, and so on...).
And finally, the third percent is “just in case”: in case the bank issues a loan to some borrower, and this borrower does not pay the loan.
And the difference, in most cases, between the attraction rate and the rate at which the bank issues mortgage loans is 3%. In the banking community, such a difference (such a margin) is considered normal.
That is, when a bank issues a loan at 9.5% per annum, it attracted money somewhere at 6.5% per annum. (Or maybe even at 6%).
In order for the bank to reduce the interest rate, well, let’s say, to the values that our wonderful Government promised us (that is, to 6 percentage points), what is needed?
The bank needs to raise money at 3%.
Question: where can I get them?
You are about to take out a mortgage loan.
Your relatives, at the same time, keep a deposit in the bank.
Please tell me, if you offer them to deposit money at 3 percentage points: this will be a payment on your deposit (on their deposit, or rather). Tell me please, what will they tell you?
Will they take the money to the bank at 3%?
I think not.
I think that most likely they will convert this money into dollars (most likely) and hide it somewhere under the pillow... Well, for some reason it seems so to me.
That is, there comes a time when interest rates are such that depositors no longer want to take money to the bank.
We are not Europe, where bank licenses have not been revoked for centuries.
Thanks to our wonderful Central Bank, we are putting things in order banking sector", and licenses are revoked in batches. (One hundred or more pieces per year).
Accordingly, the population does not have such trust in banks (that it is reliable, that I can deposit money and not think about it anymore).
Consequently, since the population does not bring money to banks at lower interest rates, placing money on deposits, then, accordingly, the bank does not have many reserves to receive money and to issue money in the form of loans. Everything is interconnected here: a lower interest rate on a loan means a lower interest rate on deposits (and vice versa).
Today, I see no economic reasons for banks to cut rates. I just don't see it.
Because, well, imagine that you are a bank. You have a queue of borrowers.
Tell me, please, do you need to reduce the interest rate?
Need to?
For what? In order to reduce your profits?
Why, if you feel so good! If they are already coming to you in a crowd?
If in 2017 you issued more loans (twice as many) than in previous years. If the growth rate of loan issuance is a record!
Why should you reduce your interest rate?
For what?
That is, when banks reduce interest rates, for some reason they need it. After all, if interest rates are lower, the bank's income is lower.
It could be higher if our base increases, if we issue more mortgages.
But when mortgage loans are already issued well at current rates, if the number of borrowers is growing, why would the bank reduce interest rates?
Therefore, I do not see any potential for lowering interest rates.
And after the elections?
And after the elections, anything can happen.
Now, if I needed to buy an apartment now, I personally would not delay this decision.
Well, it’s up to you, of course. I expressed my opinion to you.
Thank you for your attention.
I was with you, Dmitry Ovsyannikov and the project “site, About mortgages in Russian.”
If you liked the video, give it a like. Subscribe to our video channel. Well, if you have any questions, ask them.
According to analysts and experts, mortgage rates are expected to continue to decline in 2019. Based on the latest news on this topic, a significant slowdown in inflation led to a gradual reduction in the base rate, which means it made lending a more accessible resource.
An additional factor that positively influenced the stabilization of the credit sector in the economy was the provision of on-lending opportunities. Today's borrowers are actively trying to renew their loan at lower interest rates and thereby reduce the payment amount. Our article will focus on the latest information regarding when the mortgage rate decreased and what future prospects await potential borrowers or people who have already used this service.
According to the head of AHML A. Plutnik, in 2019 mortgage lending will become much more accessible to Russians. The average interest rate in this case can be up to 10%, which will significantly increase the attractiveness of housing lending.
Already at the end of last year, the rate reached pre-crisis levels, but this became possible thanks to the participation of the state. About 30% of all existing loans were issued with the participation of federal funds and within the framework of existing state programs. According to such programs, the maximum possible level of interest rate on a loan can be up to 12% per annum, but no more. According to the terms of the new programs, government support will not be required in the future. This is due to the establishment of reduced key mortgage rates, as well as the determination of real lending volumes. The current situation suggests a revival in demand for housing loans, especially given the growth in household incomes.
Economic factors that may affect the percentage
The Russian economy has quite successfully overcome the crisis situation, and now this allows us to note a significant improvement in macroeconomic indicators. In general, there is a significant slowdown in inflation, which could reach 4% this year. It was this indicator that influenced the formation of the Central Bank of the Russian Federation rate, which amounted to 9.25% in April last year.
In addition to these points, two more economic indicators have a significant impact on the mortgage rate. On the one hand, positive dynamics are observed due to the strengthening of the ruble, and on the other, with rising oil prices. Today, the cost of “black gold” makes it possible to replenish the federal budget, and therefore increase the size social support population in matters of housing lending.
What mortgage rate is expected in 2019
According to experts, further improvement in economic indicators could be a serious reason for reducing the key rate to 6-7%. This trend can only be changed by new problems and difficulties in economic life countries, as well as political nuances.
This situation is unlikely to occur, so the cost of housing loans will be significantly reduced, which, in turn, will cause an increase in demand for banking products from the population. Thanks to this opportunity, mortgage volumes will quickly reach pre-crisis levels even without government participation. In addition to reducing the actual cost of loans and increasing income, psychological factors will play an important role.
Consumers will pay much more attention to existing credit offers, which, in turn, will lead to an increase in lending volumes within the framework of providing mortgages.
Possible risks associated with rate cuts in 2019
Despite the fact that the forecasts are very optimistic, experts report that one should not rejoice ahead of time and expect a decrease in mortgage rates. The fact is that due to a fall in mortgage interest rates, a so-called “bubble” effect may occur in the real estate market, which will lead to another mortgage crisis.
To eliminate the possibility of such a situation developing, it is necessary to carefully check and analyze the data, and also try to predict possible consequences for borrowers and the market. Among other things, experts do not exclude the possibility of the introduction of disinformation against the backdrop of the presidential elections in the Russian Federation, since so far the Central Bank of the Russian Federation has not taken any action regarding the current rate.
Experienced analysts predict a possible decrease in the mortgage rate to 8.5% in 2019, followed by an increase in demand for housing loans from the population. This assumption is more realistic because it is based on the circumstances of the actual situation. However, it may well turn out that the housing lending rate will remain unchanged, at the same level.
Conclusion
In conclusion, it should be noted that such forecasts will allow citizens planning to get a mortgage to draw up their action plan and, possibly, postpone contacting the bank in order to take advantage of new, preferential conditions in the future and receive a loan at a lower interest rate.
In 2018 Russian banks will continue to actively issue housing loans, while market growth rates will slow down, analysts predict rating agency“Expert RA” in the review “Regional mortgage lending markets in 2017” (available from Izvestia). Mortgage interest rates will continue to decline, but not as quickly as last year. Bankers interviewed by Izvestia believe that by the end of the year they can reach 7–8%. This is exactly the task the president set in his communication to Federal Assembly.
Mortgage rates have been falling since last March. According to Expert RA, in 2017 the weighted average rate dropped by 1.8 percentage points. and amounted to 10.6%. According to Dom.rf, in March the average mortgage rate in the top 15 largest banks in Russia was 9.43% when purchasing housing on the primary market and 9.5% on the secondary market.
Rates will continue to decline, but not so quickly, Expert RA predicts: over the year they will drop by another 1–1.5 percentage points. Banks surveyed by Izvestia also expect a decline. According to Gazprombank's forecast, by the end of the year, rates on housing loans will reach 7–8%, Vozrozhdenie Bank predicts a decrease to 8.3–9%, and DeltaCredit - 8.5–9%. Ak Bars and VTB believe that the downward trend will continue, but did not name specific targets.
Relatively low rates were the driver of mortgage market growth last year: banks issued 1.1 million new loans worth 2 trillion rubles - an increase of 37%. But the market still has growth potential: this year banks will be able to issue loans for the purchase of housing for another 2.4–2.5 trillion rubles, Expert RA predicts - this means an increase of 20–25%. By January 1, 2018, the total amount of mortgage debts of Russians reached 5.2 trillion rubles.
In 2018, the market will grow further, but the pace will not be as high, since a large base of mortgage loans has been acquired. In addition, the pace of new housing commissioning in a number of regions is low, and mortgages on the secondary market, as a rule, are not so interesting for banks,” explained Ivan Uklein, junior director for banking ratings at Expert RA.
Banks agree with this assessment: DeltaCredit and Gazprombank predict that loans will reach 2.5 trillion rubles, VTB - 2.4-2.5 trillion rubles, Rosevrobank - 2.4-2.6 trillion rubles, Svyaz-Bank - around 2 trillion rubles. Bank Vozrozhdenie is very optimistic: according to Deputy Chairman of the Board Natalya Shabunina, the volume of housing loans can grow by 30–60%.
The mortgage market still has enormous potential, and we do not expect it to become oversaturated: penetration into the country’s GDP does not exceed 6%, which is an order of magnitude less than in other countries,” noted Evgeniy Dyachkin, head of the VTB mortgage lending department.
The mortgage lending market experienced rapid growth in 2017 - a reduction in the Central Bank's key rate and a slowdown in inflation to a historic low led to a noticeable reduction in loan interest rates. The market and government programs for certain categories of citizens were stimulated: large families and families of military personnel. The banks themselves offered reduced rates and refinancing of loans taken from other banks at a lower interest rate.
Russian President Vladimir Putin said in his address to the Federal Assembly that the mortgage rate should be reduced to 7%. If the Central Bank continues to reduce the key rate, banks will be able to afford a more lenient policy on housing loans. A mortgage is considered one of the most reliable types of credit - the level of delinquency is lower than for consumer loans, and in case of non-payment, the bank can always sell the property.
Mortgage in 2018 should develop at an even faster pace than last year, housing market experts are convinced. Today there are several serious prerequisites for this. The 2017 results for the volume of mortgage loans issued are also encouraging. And not only for people with good incomes. The most logical question - is it worth taking out a mortgage in 2018 - is answered by the FederalPress material.
Last year, the total amount of mortgage loans issued exceeded 2,000 billion rubles, an increase of 36% compared to 2016, they said at the IV Russian Mortgage Congress, held recently in Moscow. The popularity of mortgages was added by the fact that the mortgage rate dropped below the psychological level of 10%, and financial and credit institutions issued about 87 thousand loans for a total of 156 billion rubles for refinancing.
According to financial estimates, the volume of the mortgage lending market will continue to grow in 2018. This trend is typical this year both for the Urals in particular and for the entire country as a whole, financial sector experts believe, based on 2016-2017.
Thus, in 2017, the mortgage lending market in the Sverdlovsk, Chelyabinsk, Kurgan regions and the Republic of Bashkortostan increased by more than 40% compared to 2016. The large growth of the market in the Sverdlovsk region was due to a significant increase in the volume of loans issued for the purchase of housing in new buildings - in 2017 it grew by 43%. For comparison, on average in Russia the similar segment grew by only 16%.
The active development of mortgages is influenced by several key factors - a decrease in interest rates on loans, and the development of special programs from banks and developers, as well as. An example of the latter is the launch of the “Mortgage with state support for families with children,” which provides the end borrower with an interest rate of 6%.
Experts also note the general liberalization of requirements for borrowers and the cost of loans (reducing lending rates and the minimum down payment), an increase in the refinancing of mortgage loans from other banks and the development of programs with developers to subsidize interest rates.
“Today, banks offer many programs with rates of 6% and above. To be more specific, for the most part, rates in use now range from 9% to 10%. Again, the launch in 2018 by the Russian government of the Family Mortgage program with state subsidies provides new opportunities for young families with children, which is generally positive progress in the field of mortgage lending in the primary market. It is expected that this program will become a driver this year,– the head of the mortgage lending department at Glavstroy commented on the situation. Evgeny Kuznetsov. – As such, there are no difficulties with obtaining and applying for a mortgage; everything is quite easy and understandable. In general, it can be noted that the state is trying in every possible way to make it more attractive to purchase apartments on the primary market using mortgage loans.”.
Independent experts believe that it is worth taking out a mortgage right now, since the price of the apartments themselves has decreased. And this happened not only because of the crisis, but also thanks to the development of the industry.
“It is expected that construction prices will decrease by 10% until 2020, that is, they will decrease by 30%. And this is normal, this is correct, because new technologies are emerging, new technologies for laying foundation pits, new laying foundations, erecting walls,– noted in a conversation with our correspondent the director of the Institute of Industry Management (IOM) of RANEPA, dean of the Faculty of Real Estate Economics of IOM RANEPA Elena Ivankina. – In fact, if construction takes into account all the requirements for design, construction time, and energy efficiency, because we need to reduce the energy consumption of each built house by at least 10 times, then the results will be much better than now.”.
“Banks are also trying to further spur mortgage demand,– says the head of the analytical center of Rusipoteka LLC Sergey Gordeyko. – Financial institutions are actively introducing digital mortgages for both clients and partners. It will develop very quickly electronic registration transactions and remote identification of clients".
Indeed, for example, Sber is introducing the submission of documents to register a home purchase transaction in Rosreestr directly through the offices of partner companies. “You can submit documents in 15 minutes, and within five to seven days all participants in the transaction receive registered documents by email. Previously, the procedure for preparing, collecting, submitting and registering documents for primary housing through Rosreestr or the MFC took on average up to 30 days.”, - they told us at the press center of the Ural Bank of Sberbank of Russia.
In the primary market, almost half of all transactions are carried out with a mortgage loan, experts say. In turn, almost 30% of issued mortgage loans are for the purchase of new buildings. In the secondary market, the share of loan transactions increased to 35%. According to forecasts, this segment will develop throughout the year. At the same time, all leading lenders have successfully mastered refinancing.
“The share of refinancing in annual sales is close to 8%. As a result, about 87 thousand borrowers changed one lender to another. As a reward for this shift, they received new loans at a lower rate in the amount of about 156 billion rubles, and the old loans were repaid ahead of schedule. In 2018, the share of refinancing will increase to 15% of sales volume and will begin to decline in the fall. In 2017, banks refinanced other people's borrowers. The Central Bank is trying to change this trend so that they can refinance their own more actively.”, says Sergei Gordeiko.
Analysts predict further rate cuts, predicting low inflation. The interest rate is projected to be approximately 6%. The lending rate consists of inflation, of the margin, which is from the lending rate that the Central Bank sets (based on inflation) plus the Central Bank margin, plus the margin of all other banks that took money from the Central Bank, experts remind.
“In 2018, the market will grow by 25%. 1.36 million loans worth 2.53 trillion rubles will be issued. This will be the year of the client. All changes are only for the benefit of the borrower. Average offer rates for loans for the purchase of apartments on the primary and secondary markets decreased approximately equally by 2.2-2.3 percentage points. There was no pause in rate cuts in January, which is new. Usually there is a short pause in January. In December, the average rate on loans issued will tend to 8%. The decline will be uneven throughout the year. Stormy spring and calm autumn",” Sergei Gordeyko gave his forecast to the expert channel.
“Therefore, our economy is shaping up in such a way that the mortgage lending rate is 4% higher than inflation at 3.5-4%. That's a lot. I can say that even in the Czech Republic the mortgage rate is 4.5%. If you pay the required amount monthly for three years, then your rate drops to 4.25, then to 4.15, etc. Practically, this is the European level of lending. If we get there, and we are moving very quickly along the path of developing mortgage lending, then this will be a very big deal for our country. Because housing, work and wages, the development of a credit sales system are the main points on which everything now rests. And for the development of the housing system, a mortgage is needed, which is receiving more and more attention.”,” emphasized Elena Ivankina.
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