Issuance of loans for new buildings may be reduced by 20–40%

The issuance of preferential mortgage loans for new buildings could be reduced by 20–40% if requirements are tightened. Among the changes being discussed, the most sensitive for the market seems to be an increase in the down payment to 30%. It would eliminate three quarters of the current pool of loans. However, demand for the preferential program is already declining due to previous restrictions. The interest of citizens is switching to the “family mortgage”, which has not yet been affected by the containment.

New measures to cool preferential mortgage lending being discussed by the authorities could significantly reduce the volume of transactions, market participants and experts interviewed by Kommersant believe. The day before, Interfax and Izvestia, citing sources, reported plans to increase the initial payment under the program to 25–30%.

Also discussed is reducing the loan limit in the main regions (Moscow, St. Petersburg, Moscow and Leningrad regions) from 12 million rubles. up to 6 million rubles and a reduction by 0.5 percentage points in the maximum amount of subsidies received by banks, as well as a ban on borrowers taking out more than one soft loan under the six programs currently operating. However, Kommersant’s sources in the financial market clarify that the final changes have not yet been approved. The Central Bank confirmed to Kommersant that they did not receive documents with the final conditions.

The Ministry of Finance did not respond to Kommersant’s request. The Bank of Russia supports increasing the down payment on preferential mortgages:

“It is important for us to prevent borrowers from falling into debt. The larger the down payment, the smaller the loan required and the easier it is for a person to cope with debt repayment.”

There is no talk yet about increasing the rate on preferential mortgages.

Of the listed measures, increasing the down payment is of particular importance for the market. In 2023, according to the operator of preferential programs JSC Dom.RF, mortgages with an initial payment of up to 30% account for 77% of loans. In particular, mortgages with a down payment of 15–20% accounted for 47% of issuances. Mortgages with installments of 30–50% account for 14%, while those with installments of more than 50% account for only 9%. The reduction in the maximum loan size seems less significant: according to Dom.RF, the average bill for a preferential mortgage is 4.6 million rubles.

The minimum down payment for a preferential mortgage was already increased in September by 5 percentage points, to 20%. According to the head of Rosbank Dom, Vadim Mamonov, this measure, coupled with an increase in premiums, led to a drop in issuances by almost 20%. According to the Central Bank, in September they amounted to 955 billion rubles, and in October – only 770 billion rubles. Mr. Mamonov believes that with an increase in down payment requirements to 30% and a reduction in bank compensation, the market decline could be “at least 30–40%, threatening to create systemic risks in the industry.”

However, the director of the corporate ratings group of the NKR agency, Yegor Lopatin, expects only a “moderate cooling effect” from the new measures.

Increasing the contribution to 30% “cannot be called protective,” he believes. In addition, the expert notes, the largest share in the issuance of preferential programs is occupied by “family mortgages,” the conditions of which are still unchanged. She, Mr. Lopatin believes, “will remain a market driver.” For example, as of the beginning of November, “family mortgages” accounted for 18.1% of the total portfolio, preferential mortgages for new buildings – 16.8%, Far Eastern mortgages – 1.9%, IT mortgages – about 1%.

At the same time, the managing director of the Expert RA rating agency, Yuri Belikov, believes that the effective demand for mortgages in general is “already close to exhaustion.” In his opinion, “taking into account the existing negative trends, together with the regulatory measures already taken to cool the market, the issuance of mortgage loans may drop to a level of less than 450 billion rubles. per month,” and in certain periods – up to less than 300 billion rubles. per month. The average monthly volume of issuances this year, according to Kommersant’s estimates, exceeded 540 billion rubles.

Olga Sherunkova