Mortgage rates may determine wage levels in the region

Deputies propose tying preferential mortgage rates to the average salary in each region. This is expected to increase the participation of citizens in housing financing. The Central Bank promises to discuss this proposal with the government. Experts believe that the main goal of adjusting rates should be to ensure housing affordability. But to do this, you will have to take into account not only wages, but the cost of living, the average cost of housing, the level of security, the share of the old fund and many other factors.

The Bank of Russia is going to discuss with the government the proposals of deputies to differentiate interest rates on preferential mortgages depending on the average salary level in the regions. The idea was announced on November 16 by State Duma Chairman Vyacheslav Volodin, addressing the head of the Central Bank, Elvira Nabiullina.

According to the deputy, the measure will allow “citizens to more actively participate in housing construction through mortgage programs.” According to Ms. Nabiullina, other criteria should be taken into account, such as the degree of mortgage penetration. The Ministry of Finance did not answer Kommersant.

In Russia there are examples of differentiation of rates for preferential programs. For example, the Far Eastern and Arctic mortgage program assumes a rate of 2% per annum, while for mortgages on new buildings – 8% per annum, for family mortgages – 6% per annum. In a number of regions, there are rates for preferential categories of the population, which are subsidized from the local budget, notes Sergei Babin, head of the Mortgage Lending Department at VTB.

As of October 1, mortgages accounted for more than half (53%) of the retail loan portfolio of Russian banks. At the same time, the share of preferential programs has recently risen against the backdrop of rising market rates (see “Kommersant” dated October 24) has grown significantly. According to the results of the third quarter, in the structure of issuances it reached 48% versus 34% a year ago, according to data from Dom.RF JSC.

According to Dmitry Grinkevich, manager for analysis of the banking and financial markets of PSB, differentiation of rates on a regional basis will allow “to direct the program to the development of housing construction exactly in those regions where it is necessary.” “At the same time, this will help prevent overheating of the real estate market in the most economically developed regions. The absolute volume of preferential mortgage issuance will likely decrease, since the bulk of it is in the largest cities,” the expert believes.

At the same time, experts note that the difference in rates should affect the affordability of housing. Therefore, Kommersant’s interlocutors draw attention to the need for an “integrated approach to the proposal.” In particular, according to Natalya Vashchelyuk, chief analyst at Sovcombank, in addition to wages, attention must also be paid to “the cost of living and, possibly, other incomes of citizens.” For example, in Moscow the average salary is three times higher than in the Kostroma region, but the cost per square meter in a new building in Moscow is four times higher, explains Ms. Vashchelyuk. Low income can be a criterion for targeted mortgages, says Anton Tabakh, chief economist of the Expert RA rating agency.

To implement the measure, an assessment of the average cost per square meter in the region, the level of housing supply, the ratio of old and new funds, and the dynamics of the commissioning of new houses is necessary, believes Irina Babina, chief analyst of the mortgage products department of Rosbank. “As a result, preferential rates below the average level can be applied in relatively small regions with low market capacity (Altai Territory, Republic of Tyva, republics of the North Caucasus Federal District, etc.),” says Dmitry Gritskevich.

In addition, experts emphasize that even within one region there can be significant differences in the level of income of citizens, which cannot but complicate the implementation of such ideas.

Differentiation should be aimed at bringing preferential rates closer to market rates in regions with high incomes and, accordingly, with high mortgage penetration, says Mikhail Doronkin, managing director of the NKR rating agency. According to his assessment, this will allow “to somewhat cool down rising prices.”

Thus, according to the Central Bank, on average over three years, prices for new buildings increased by 90%, which is twice as much as the increase in wages. According to Mr. Doronkin, it is unlikely that it will be possible to completely avoid social inequality, but “the government is rather faced with the issue of stabilizing prices, and here the availability of mortgages in a particular region plays an important role.”

Olga Sherunkova