According to the Central Bank, the previous peak in the volume of mortgage issuance in the Moscow region was recorded in August – 166.1 billion ruble, and before that – in December 2021, before the crisis (154.1 billion).
“Home loan issuance reached record levels in September due to expectations of tightening the conditions of aid programs And people’s desire to get loans at pre-approved rates Before increasing following the base rate. A similar situation occurred in August. At the same time, the weighted average interest rates on ruble mortgage loans in Russia decreased even by 0.5 points in September of this year compared to June 2023, taking into account preferential programs. They made it up 7.9%“” commented Elena Buzdalina, head of the economic department of the Main Directorate of the Central Federal District of the Bank of Russia.
He announced that housing loan rates in Moscow and the Moscow region decreased by 0.5 points. and 0.6 pp. before 8% And 7.9% respectively.
“This situation arose because the share of family mortgages in the total housing loan volume increased and mortgage demand was directed to the new housing market,” the Central Bank representative said.
According to the Central Bank, in September this year in Moscow and the region, 11,056 mortgage loans worth 85.2 billion rubles were issued under concessional mortgages and 9,717 mortgage loans worth 77.7 billion rubles under the Family Mortgage program.
During the year, the number and amount of mortgage loans under concessional mortgages increased by 51% and 42%, respectively, while for family loans they increased by 211%, or more than three times, and 222%, or more than three times. .
According to the Central Bank, only in July-September this year, banks in the Moscow region issued housing loans. 473.8 billion ruble This is 1.6 times more than in the third quarter of 2022 and 2021. The share of overdue debts amounted to 0.5% of the total loan volume (an average of 0.4% in Russia).
The number of housing loans granted in the July-September period this year increased 1.7 times compared to the same period last year. 73 thousand.
In Moscow, during the specified period, banks issued 40.1 thousand loans for the purchase of real estate for a total amount of 292.5 billion rubles, and in the Moscow region 32.9 thousand loans amounting to 181.3 billion rubles.
The average mortgage loan size in Moscow in the third quarter of 2023 decreased by 9% compared to the same period last year 7.3 million ruble and in the Moscow region – by 5.9% 5.5 million ruble At the same time, across Russia, this figure increased by 4% to 3.9 million rubles.
“In total, in the third quarter of 2023, 956 mortgage loans worth 5.9 billion rubles were refinanced in the Moscow region; this is almost double the July-September 2022 figures. The demand for refinancing mortgage loans is expected to decrease further due to increased interest rates on market programs,” commented the press service of the Main Directorate of the Central Federal District of the Bank of Russia.
Refinancing is taking out a new loan to pay off an existing loan.
What are the advantages
“Part of the high demand for mortgages in the Moscow region can be attributed to the increase in the level of well-being of some residents of Moscow and the Moscow region, who also face restrictions on the ability to spend money in the region. West – buying real estate, tourism, luxury services,” said Associate Professor of municipal administration at the Ministry of Foreign Affairs and Finance of the Government of the Russian Federation Konstantin Kharchenko.
Associate Professor of the Basic Department of Financial Control, Analysis and Audit of the City’s Main Control Department added that the high activity of mortgage borrowers contributes to the increase in demand for housing, which in turn stimulates construction and the development of the construction industry. Name of Moscow REU. GV Plekhanov Dmitry Osyanin. According to him, this can have a positive impact on the economic growth of the region and the country as a whole.
“A large number of mortgage loans can contribute to the development and improvement of the financial system. Banks will be forced to improve their mortgage lending and servicing processes, which can contribute to the development of the financial sector in the long term. Bank revenues may also increase,” Osyanin thinks.
The economist explained that the increase in the number of mortgage borrowers has led to increased competition between banks and mortgage lenders. As a result, banks began to offer more favorable loan conditions, allowing borrowers to count on attractive interest rates and improved loan conditions, the expert noted.
What are the disadvantages?
At the same time, Osyanin suggested that high activity of mortgage borrowers can increase the risk of non-payment of loans, especially in conditions where most of the borrower’s income is spent on such payments. According to him, some borrowers may fall into such a risk zone by taking on a large credit burden.
Kharchenko explained that negative consequences may arise for people who do not think about ways to repay the loan and do not correlate this with real and projected income. Therefore, the inability to repay a loan can occur not only from a job loss, which is unlikely for many, but also from an increase in prices of essential goods and the emergence of difficult life situations, the economist explained.
“The increase in total mortgage debt, which has recently worried the Central Bank of the Russian Federation, cannot be ignored.
When people take out a mortgage with a high debt burden, it creates the risk of debt default. This may lead to an increase in late payments. In addition, high activity of mortgage borrowers will generally lead to an increase in housing prices and overheating of the real estate market in the future,” Osyanin predicted.
According to data from Andrei Loboda, economist and communications director at BitRiver, many borrowers and even entire families pay at least 40% of their monthly income on servicing debts.
“And the more such borrowers there are, the more likely the credit bubble will be inflated,” he said.
Candidate of Economic Sciences, stock market expert of BCS World of Investments Mikhail Zeltser is confident that in the coming months, high mortgage rates will make themselves felt and the unrealized demand from borrowers will be largely satisfied. Others said they would prefer to hold off on buying expensive real estate until better times come when prices drop.