Authorities are thinking about extending cheap mortgage loans
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The cancellation of part of the preferential mortgage programs next summer will lead to a reduction in the commissioning of new housing by a total of 30 million square meters by 2028. m, they fear in the office of the relevant Deputy Prime Minister Marat Khusnullin. In return, they propose to launch a single “socially oriented program” of lending. Subsidized rates have long caused complaints from the Central Bank, which believes that they have led to an increase in housing prices, reducing its affordability. However, the immediate abolition of all preferential programs will indeed cause a sharp slowdown in the real estate market, experts admit.
After the abolition of housing loans with a state-subsidized rate of 8% and family mortgages of 6% from July 1, 2024, it is necessary to launch a single “socially oriented program,” says the Infrastructure Development Strategy until 2030, prepared by the office of Deputy Prime Minister Marat Khusnullin (“Kommersant”) ”read the document). It emphasizes that preferential mortgages made it possible to increase the volume of housing construction: from 82.2 million sq. m. m in 2020 to 102.8 million sq. m in 2023.
If the preferential mortgage is cancelled, the document notes, in 2025–2028 “the commissioning of 30 million sq. m. will be at risk. m of housing” throughout the country and developers will be forced to significantly reduce the launch of new projects.
According to Dom.RF, at the beginning of September 2023, 6.88 trillion rubles were issued under all preferential programs, aimed at the purchase of 96.6 million square meters. m of housing. Thus, 3.94 trillion rubles were issued for mortgages at 8%, and 2.49 trillion rubles for family mortgages. Until 2030, the Far Eastern mortgage is valid at 2%, within the framework of which 304.8 billion rubles were issued. For IT mortgages at a rate of 5% (valid until the end of 2023) – 143.3 billion rubles.
The strategy states that the Central Bank is already tightening the conditions for obtaining a mortgage. Thus, after raising the key rate in August to 12%, and in September to 13%, the weighted average rates of preferential loans may increase, which at the beginning of September, according to Dom.RF, amounted to 4.57–5.38% in the presence of an initial contribution of 28.5–30.75%. In addition, from September 20, the minimum contribution increases from 15% to 20%. This could lead to a decrease in lending in September-December 2023 by 20% year-on-year, and in 2024 by 35%, the document notes. The Central Bank explained the tightening of down payment requirements by reducing the further growth of high levels of debt among the population.
Preferential programs are one of the reasons for the “systemic increase in the debt burden of citizens,” agrees Managing Director for Validation of the Expert RA rating agency Yuri Belikov.
Meanwhile, the strategy states that tightening mortgage issuance “leads to an artificial rush of demand.” Thus, in August – before increasing the requirements for the size of the down payment – in Moscow and the Moscow region, according to Dataflat.ru, the volume of transactions in Moscow and the Moscow region increased by 64% year-on-year, to 18.43 thousand, and the total revenue of developers – by 88%, to 263.58 billion rubles, in St. Petersburg and the Leningrad region – by 52%, to 7.7 thousand and by 55%, to 64.75 billion rubles, respectively.
“In August, the transactions were closed by buyers who tried to get approval for a mortgage in July, when it was already known that the conditions for issuing loans were tightening,” says Irina Dobrokhotova, head of the board of directors of Best-Novostroy.
Developers also oppose the abolition of preferential programs. Such loans now account for more than 80% of all transactions in the market of residential new buildings, notes Denis Konovalenko, managing partner of Prime Life Development.
According to Yuri Belikov’s forecasts, the volume of transactions in November-December may decrease by 25–30% month-on-month, including due to an increase in the down payment. With an average cost of an apartment of 12 million rubles. The amount of the contribution increases from 1.8 million to 2.4 million rubles, according to Anatoly Klinkov, director of investor relations at A101 Group of Companies. “Because of this, we are already recording deal failures due to the latest decisions of the Central Bank,” notes Asterus commercial director Vera Stefan.
According to independent expert Anastasia Egazaryan, the gradual phasing out of preferential mortgages and a “selective approach to subsidies” are economically justified, as this can stabilize the rise in housing prices. “But developers and banks are trapped in preferential programs, from which they can only get out with large losses,” says Kommersant’s interlocutor in the market. The immediate abolition of preferential programs will indeed lead to a very sharp slowdown in the market, agrees Mr. Belikov. Therefore, according to him, it is necessary to bring preferential rates closer to market rates and reduce them after the Central Bank softens monetary policy.
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