The new building market in Russia has actually turned into a “drug addict”, which requires a constant increase in the dose of “subsidies”. Government support of the market through mortgage subsidies “inflates the price bubble”, makes housing more and more inaccessible to citizens, and it is better to abandon such a practice. About this RBC reported Specialists of the analytical center “Indicators of the real estate market” (IRN).
Analysts noted that the mortgage subsidy leads to higher home prices, which goes against the stated purpose of the program. As an example, experts cited the launch of a preferential mortgage program of 6.5% in 2020. The program was launched, but its effect was offset by rising prices for new buildings. According to analysts, subsidies were needed last spring when the Federal Reserve raised the key rate to 20% and banks nearly stopped issuing mortgages.
Now the situation has stabilized, so there is no need for subsidies, according to the IRN: this will lead to lower housing prices. IRN is confident that refusing to subsidize the market will not have serious consequences for developers. IRN said a 10-30% price correction is the norm and developers should be ready for it.
The preferential mortgage program for new buildings was launched by the government in 2020 to support Russia’s new buildings market. It was originally intended for a few months, but has since been extended multiple times and remains valid until June 1, 2024.
media in May reportedan increase in the risk ratios on mortgage loans for the purchase of apartments in new buildings from May 1, increasing the rates of long-term OFZs to 11% and an attempt to expand the preferential mortgage program to the secondary market. In May, the mortgage has already increased in price in MCB, Sovcombank and the bank “Saint-Petersburg”.