The share of government-backed loan programs in the overall housing loan volume could reach as high as 60 percent by year-end 2023, surpassing more than a quarter of the level recorded at the start of January. This projection came from Sergey Babin, head of the Mortgage Loans Department at VTB, and was relayed to socialbites.ca through the bank’s press service.
“By year-end, government support may climb by another 10 percentage points to total 60 percent of the lending volume, which is well above the 45 percent mark seen at the beginning of the year”, the press service quotes Babin as saying.
VTB also noted that following a rise in the market’s mortgage program rates, attention is shifting toward government-sponsored schemes designed to keep borrowing costs low. Demand for standard programs, which frequently involve second homes, is likely to wane. The bank attributed this shift to higher finished-apartment prices and to additional actions taken by the Central Bank to regulate the housing market.
Anastasia Skuratova, head of the Regional Analysis Department in the Main Directorate of the Central Federal District of the Bank of Russia, told socialbites.ca that preferential programs are now supporting the mortgage market as a whole, with loans available at an annual rate of 8 percent. She also acknowledged that long-term loans, including mortgages, should become more affordable for Russians, and that the inflation premium included by banks in loan rates is set to decrease, which would lead to lower overall interest costs.
Following the Central Bank’s move to raise the policy rate by 350 basis points to 12 percent annually, major banks—ranked among the top 30 by assets—raised housing loan interest rates by roughly 1.5 to 3 percentage points on average. The typical mortgage rate hovered around 14 percent per year.
Previously, socialbites.ca discussed what could happen to mortgage rates and apartment prices in Russia this fall, offering context for these shifts. [Citation: Bank of Russia press service; socialbites.ca reporting]”