Mortgage rates in Russia may be reduced by the end of 2019. The head of Sberbank, German Gref, told reporters on Wednesday, January 23, on the fields of the World Economic Forum (WEF) in Davos.

“According to my personal feelings, inflation in the second half of the year should stabilize already. My personal prediction is that by the end of the year, in general, rates can go down for mortgages as well. But how will macroeconomics take shape, while it is difficult to make plans, ”the words of German Gref are given by TASS.

According to Rosstat, in the first three weeks of January, inflation in Russia in annual terms was about 4.8%. As the head of the Central Bank Elvira Nabiullina stated earlier, the rise in prices can accelerate as much as possible in March-April, up to 5.5-6%, and after that will begin to slow down. According to the forecast of the Central Bank, according to the results of 2019, the value may reach 5-5.5%, and in early 2020 it will return to the target mark of 4%. This is stated in the materials of the Bank of Russia.

As the experts interviewed by RT explain, consumer price dynamics directly affects the change in the key rate of the Central Bank. Russian banks, in turn, closely monitor the actions of the regulator and, on the basis of the decisions made at the Central Bank, independently determine the level of long-term interest rates, including mortgage ones. As clarified by QBF Investment Advisor Alexei Korolenko, mortgage rates begin to follow the market only after a certain time, and therefore are a kind of "lagging indicator."

Thus, against the background of the reduction in the Central Bank rate in the first half of 2018 (to 7.25% per annum), the weighted average rate on housing loans issued in September reached a historic minimum and dropped to 9.41% per annum. At the same time, already in the second half of the year, in order to limit inflation risks, the Bank of Russia twice raised its key rate (to 7.75% per annum). As a result, Russian banks announced an increase in mortgage rates, and in November, the weighted average for Russia rose to 9.52% per annum. This is stated in the materials of the Central Bank.

“According to the forecasts of the Central Bank, after March-April, inflation should stabilize. Accordingly, in the second half of 2019, as inflation approaches the target of 4% and lowering inflation expectations, we do not exclude the regulator’s return to the policy of reducing the key rate. Under appropriate conditions, in the second half of the year, the regulator may lower the rate by 0.5 percentage points - up to 7.25% per annum, ”Anastasia Sosnova, analyst at Freedom Finance, told a RT interview.

Moreover, as noted by Alexey Korolenko, the possibility of stabilizing inflation in the second quarter of 2019 had a positive effect on the mood of market players. As a result, federal bond rates (OFZ) began to fall in Russia. According to the expert, this factor can also speak about the likely decline in mortgage rates by the end of 2019.

Short respite

In general, as follows from the materials of the Central Bank, from January to November 2018 the growth of the Russian mortgage market reached a historic maximum. Thus, over the first 11 months of the year, for the first time, over 1.31 million mortgage loans were issued for a record amount of 2.67 trillion rubles.

“Starting from 2015, the mortgage rate has dropped by a record - almost 4 percentage points. Plus, against the background of a stable situation in the labor market, people could easily predict their incomes, while prices in the real estate market remained normal. That is, all three factors contributed to the fact that people began to enter the mortgage market and solve their housing problems, ”said Irina Radchenko, vice president of the International Academy of Mortgage and Real Estate.

However, as the expert notes, after the increase in mortgage rates by many banks since January 2019, the growth rate of the housing loan market may slow down somewhat. Moreover, as explained by German Gref, a change in the system of financing housing construction with the transition to escrow accounts will lead to a reduction in market supply. As a result, against the background of high demand for real estate housing prices will start to grow. According to the head of Sberbank, this may adversely affect the mortgage, but at the same time, the negative effect will be temporary. In the end, as Gref clarified, mortgage rates could still drop by the end of the year, reports TASS.

Recall, as expected, changes in the housing finance system will come into force on July 1, 2019. Shareholders will be able to place their funds on the so-called escrow accounts. This is a special account, which takes into account property, documents or cash. The assets lie on it until the developer fulfills its obligations. For example, a construction company will receive money from a bank only after it has commissioned housing and will give the owners keys. Up to this point, the funds of the interest holders will be a pledge of the bank in granting loans to developers.

Economic factor

Even in the conditions of a slowdown, RT analysts polled point out that the growth potential of the Russian housing loan market remains. So, according to Anastasia Sosnovoy, the resumption of lowering rates may give a new impetus to the mortgage in Russia.

At the same time, as Roman Blinov, Head of the Analytical Department of the International Financial Center, explained in an interview with RT, for a more serious growth in mortgage rates, Russia today needs to significantly increase labor productivity and, accordingly, GDP growth rates. This, in turn, will lead to an increase in household incomes and an increase in the level of savings and expenditures of citizens.

At the same time, as the expert explained, one of the factors complicating the acceleration of the Russian economy is the current anti-Russian sanctions. The participants of the World Economic Forum expressed a similar point of view.

“The forecast of 1.8% GDP growth is not a particularly good forecast. Of course, Russia has great potential. We can easily see the numbers 6, 7, 9%. But, unfortunately, the geopolitical headwind is very strong, ”said SUN Group Vice-Chairman Shiv Vikram Khemka during a meeting at the Russian House in the official Russian residence in Davos.