Individual housing construction lending increased in October amid a general decline in mortgage lending

Against the backdrop of a general decline in mortgage lending volumes, in October the issuance of loans for individual housing construction (IHC) increased noticeably – by almost 20% compared to the previous month. In general, in January-October, banks issued four times more loans for the construction of private houses than a year earlier. This rapid growth is due to the low base of last year and active demand for preferential programs, which still remain the driver of the mortgage market.

In October, the only mortgage segment that showed growth was lending to individual housing construction, as follows from the Dom.RF review. The volume of such loans issued by top 20 banks increased by about 20% compared to September and increased fourfold year-on-year – 15.6 thousand loans for 72.4 billion rubles. against 4.2 thousand by 17 billion rubles. a year earlier.

In general, over the past year, the individual housing construction lending market has also grown significantly – loans worth RUB 388 billion were issued in ten months. (excluding loans for the purchase of finished houses), which is four times more than for the same period in 2022 (RUB 95 billion). As a result, the share of loans for the construction of private houses reached 9.4% of the total mortgage volume in October, compared to 4% a year earlier.

Note that this growth is largely due to the low base. The individual housing construction lending market, although we are talking about a large segment of construction (private houses account for more than half of housing commissioning), is, in fact, just developing. At the same time, demand is fueled by preferential programs – loans with state support account for almost all loans in the individual housing construction market. At the same time, as Deputy Prime Minister Marat Khusnullin previously noted, without strengthening the role of mortgages and introducing new solutions, this segment may show a decline in 2024–2025 (this year the pace of commissioning individual housing construction is already behind 2022; see Kommersant on 15 November).

Among the limitations of individual housing construction lending is the lack of a market for standard liquid private houses, which affects the mortgage rate. The authorities are trying to solve this problem by introducing the possibility of using escrow accounts in the construction of standard private houses (see Kommersant on November 30). According to Dom.RF estimates, this could contribute to an increase in the issuance of mortgages for individual housing construction to 150 thousand loans per year and an increase in its coverage to every second house under construction (now every fifth is being built this way). Earlier, the Ministry of Construction announced the development of a separate mortgage program for individual housing construction; the department intends to present its parameters to the government by the end of the year.

Against the backdrop of such growth in individual housing construction, the volume of loans issued for the purchase of finished private houses in October decreased in monthly terms by 10%, according to Dom.RF data. Loans for new buildings and finished apartments dropped by about 23–25%. In total, as the Central Bank reported, mortgage issuance in October decreased by 19.4% compared to the record September, to 769.6 billion rubles. against 955.2 billion rubles. This decrease was expected – the September rush was associated with an increase in the key rate, expectations of an increase in the down payment on a mortgage from 15% to 20% under preferential programs and an increase in risk premiums. At the same time, October issuances remain high both relative to the monthly average in 2023 (RUB 627.3 billion) and relative to October last year (an increase of one and a half times) – against the backdrop of high sales, developers have intensified the launch of new projects (see Kommersant) from November 22). The Central Bank explains this by the fact that preferential programs, despite the tightening, remained the driver of mortgages (their share in the total volume was 70%), although their issuance decreased slightly (minus 17.4% per month). Market mortgage loans dropped by a quarter over the month, to 226.5 billion rubles.

In November, the demand for preferential mortgages continues – 400 billion rubles were issued in three weeks. such loans. As noted in the “Monitoring of Mortgage Lending” by the Gaidar Institute, until the end of the year, mortgages with state support “will keep the market from collapsing – with an increase in the share of preferential mortgages, the total number of loans issued will stagnate.” However, experts do not rule out that potentially high demand will allow banks to adapt and continue to expand their mortgage portfolio.

Evgenia Kryuchkova