The secondary housing market gave the green light to family mortgages: who will receive benefits

And what will be the percentage

Russian President Vladimir Putin instructed the government, by July 30, 2024, to prepare proposals to provide families with children with the opportunity to purchase housing on the secondary market using a preferential mortgage in those settlements where “housing construction is carried out in insufficient quantities.” Until November 30, the Cabinet of Ministers must “ensure the implementation” of the proposals presented. This was reported on the Kremlin website. Who can get preferential housing loans on the secondary housing market?

The instructions of the head of state did not surprise the experts interviewed by MK. Back in February 2024, Vladimir Putin, speaking to the Federal Assembly, proposed extending the family mortgage, which ends at the end of June, until 2030. At the same time, the president instructed the government to pay special attention to families with children under six years of age. For such families, the preferential loan rate will remain the same – 6%.

As Aleksey Novikov, director of the mortgage lending department at Est-a-Tet, noted to MK, the initiative to extend preferential mortgages to secondary housing was bound to appear sooner or later. In his opinion, such a measure is necessary, relevant and expedient, since it increases the affordability of purchasing an apartment or other real estate in small settlements where the primary market is not developed and there are a small number of new buildings. This means young families will be able to stay and live and work in these small towns and villages. Moreover, according to Novikov, it would be correct to extend family mortgages to secondary housing in all regions of the Russian Federation.

For now, we are talking, rather, about expanding family mortgages (intended for families with children), rather than preferential mortgages that any citizen can receive,” Ruslan Syrtsov, managing director of Metrium, noted to MK. According to him, supporting demand in the secondary housing market is now necessary, since mortgage rates for secondary buyers are not subsidized, and their market level reaches 16.8% per annum. At the same time, the market for new buildings cannot be a full-fledged alternative for those buyers who cannot become shareholders and wait for the completion of construction (no place to live, no money for rent).

There are relatively few finished housing from developers, 5–10% of the total number of offers on the primary market. At the same time, there are cities where there are few new buildings and for their residents a preferential mortgage for secondary housing will be relevant. The only question is how the “inadequacy” of housing construction volumes will be determined. “In cities with underdeveloped construction of apartment buildings, a lot of individual housing is often built or the need for new buildings is not high at all, since young people leave these locations due to lack of work and low incomes. In the latter case, the feasibility of preferential loans for secondary housing in such cities is questionable,” added Syrtsov.

According to him, in the current situation, one should not expect an increase in prices for secondary housing due to the extension of preferential mortgages to apartments in cities with a small market for new buildings. These are mainly small settlements in which the demand for housing is generally weak. “Much will depend on how settlements are selected for distribution of the program. If it affects many large cities (more than 100 thousand inhabitants), then prices for secondary housing in them will, if not increase, then stabilize,” Syrtsov noted.

According to Optima Development commercial director Dmitry Golev, such benefits for citizens should not be introduced on a long-term basis. “It is much more correct to create optimal conditions for the activities of development companies, in particular, to reduce the fee for changing the type of permitted use (AUR), introduce tax preferences, and encourage the creation of social infrastructure. Still, old secondary housing is a low-liquid asset that is difficult to convert into a modern apartment,” Golev added.

Let us remind you that the decree of the President of the Russian Federation refers to families with children; there are no other recipients of possible preferential mortgages for secondary housing yet. According to Syrtsov, if the authorities decide to develop this program, then, of course, it is necessary to include doctors and teachers, whose shortage in small settlements is only getting worse. And preferential mortgages for secondary housing can become a factor keeping socially important specialists in small or depressed locations. It is also possible to expand the effect of such a mortgage, in his words, on an age basis, say, to young Russians under the age of 30-35, in order to also encourage them not to leave their hometowns.

According to Golev, the list of beneficiaries in the secondary housing market, in addition to large families, should also include doctors, disabled teachers, trainers, defense industry workers and veterans of the Northern Military District.