The Central Bank expects the mortgage market to grow by 20% by the end of the year

The Bank of Russia has improved its forecast for the development of the mortgage market and now expects a 20% growth in the portfolio of banks by the end of the year. According to the results of five months, it grew by 9%, and the issue volumes in June turned out to be the third largest in the last ten years. Bankers expect a significant increase in lending, not only compared to the past, but also to a record 2021. Mortgage lending will be supported by preferential programs and reorientation of consumers to segments with a more liberal pricing policy.

The Bank of Russia has revised the prospects for the mortgage market and now expects it to grow by about 20% in 2023 instead of previous estimates (.pdf) at 13–17% (published at the end of April). The adjusted forecast will be published this month, Elizaveta Danilova, head of the financial stability department of the Central Bank, said on Friday July 7 in an interview with the Rossiya 24 channel.

According to the review of the Central Bank published on the same day (.pdf), as of June 1, the ruble mortgage portfolio of banks amounted to 15.08 trillion rubles, which is 9% higher than at the beginning of the year.

In five months, banks issued mortgage loans for 657 billion rubles, which is almost 1.5 times more than in the same period in 2022 (including due to the failure of issuance in the spring of last year).

At the rate Frank RGin June, banks issued loans for another 640 billion rubles, the third result in ten years.

And the results of credit institutions confirm these data. In particular, Sberbank in June showed a record volume of loans since the beginning of the year – 111 thousand loans for 364 billion rubles, said the first deputy chairman of the bank’s board, Kirill Tsarev. Of these, over 41 thousand loans in the amount of 179 billion rubles. was issued under preferential programs. According to the results of six months of 2023, VTB issued mortgages to more than 110 thousand customers for 550 billion rubles.

At the same time, the situation with rates has generally stabilized. The last time four major banks raised mortgage rates was in the second half of May.

According to JSC “Dom.RF”, currently the market mortgage rates are 11-11.3% per annum. The Central Bank currently does not expect a reduction in rates, as well as an increase in demand for refinancing loans, said Elizaveta Danilova.

At the same time, bankers agree with the Central Bank’s expectations for market growth. Taking into account the annual growth rate of 20% in May, at the end of the year the growth will be 17-20%, estimates Dmitry Gritskevich, manager for the analysis of banking and financial markets at PSB. At the same time, the expert notes, this dynamics may be non-linear – before the key rate increase cycle and at its beginning, there is traditionally an increased demand for lending. “Citizens strive to have time to close deals before the rise in price of loans. This impulse, most likely, we will observe from mid-autumn, after which, due to the growth of the key rate, demand may begin to fade somewhat by the end of the year,” Mr. Gritskevich points out.

According to VTB, given a favorable macroeconomic situation in 2023, borrowers will issue housing loans in excess of RUB 6 trillion, for the first time in the history of the Russian market. This is almost a third more than last year and 10% more than the record issuance of 2021. However, this result will depend on a number of factors, including the pricing policy in the market, the bank notes. VTB plans to lend more than 1.3 trillion rubles for the purchase of real estate this year. mortgage loans, 37% more than in 2022 and 11% more than in 2021.

“Preferential programs will remain one of the drivers of the mortgage market, which is facilitated by the tendency to stabilize prices for apartments in new buildings,” PSB is sure. As a result of leaving the so-called near-zero programs in 2023, the demand of borrowers for new buildings will “cool down”, and the main interest will be in the secondary real estate market, which is characterized by a more liberal pricing policy, VTB expects.

Olga Sherunkova, Polina Trifonova