July 2020 became one of the three months with the highest rates of mortgage issuance in the entire history of the housing lending market in Russia. During this period, the Russians took out 140 thousand loans totaling 340 billion rubles. This is stated in a joint report of the DOM.RF company and the Frank RG agency.

As RT was told in the press service of DOM.RF, compared to the same period in 2019, the indicator increased by 40% in quantitative terms and by 53% in monetary terms. According to the organization, in July the maximum amount of mortgage for this month was issued.

“This is a record level for summer months in the entire history of the market, starting from 2005. Competition for the past July can only be created by indicators for December 2018 and 2019, ”the company representatives noted. 

Analysts explain the positive dynamics by the launch of a preferential mortgage program in April at a rate of 6.5% per annum. Recall that until November 1, 2020, Russians can be provided with mortgage loans with an appropriate rate of up to 6 million rubles, and in Moscow, the Moscow region, St. Petersburg and the Leningrad region - up to 12 million rubles.

“More than a third of mortgage loans in July were provided by projects with state participation. Under the 6.5% program, about 40 thousand loans were issued for the amount of about 111 billion rubles, about 700 agreements were concluded for the "Far Eastern Mortgage" for a total amount of about 2.2 billion rubles. The Family Mortgage also contributed, allowing families with two or more children to take out loans at a rate of no more than 6%, "DOM.RF specialists said in an interview with RT.

Reduced rates allow Russians to significantly save on loan interest, which makes the purchase of real estate more profitable. This point of view was expressed by the investment strategist "BCS Premier" Alexander Bakhtin. According to him, the programs are most popular in Moscow and St. Petersburg, where traditionally a square meter is the most expensive.

“As of early August, Russians have submitted about 400,000 applications for loans on favorable terms. By the end of the year, projects with state support will become one of the main drivers of increasing demand for mortgages, the volume of issuance of which may exceed the indicators of 2019 and grow above the 3 trillion rubles mark, ”the interlocutor of RT predicts. 

  • © Alexander Kryazhev / RIA Novosti

At the same time, the increased interest of Russians in housing lending is associated with a decrease in the initial payment on mortgages, experts say. Recall that on August 3, the Russian government approved a decrease in the indicator from 20 to 15% for participants in preferential mortgage programs. According to the leading economist of the information and analytical center Teletrade, Pyotr Pushkarev, the initiative did not create serious risks, but at the same time made it possible for credit institutions to significantly increase their client base.

“Moreover, rather low interest rates on deposits played in favor of the growth in demand. Russians who have already saved up for a down payment on a mortgage prefer to transfer money to buy an apartment than to continue to keep funds in deposits. Taking into account the policy of the Central Bank, which is aimed at a gradual decrease in the key rate, the volume of transactions in the real estate market will increase, "the analyst told RT. 

According to the Bank of Russia, in May 2020, the average mortgage rate in Russia dropped from 8.32% to 7.4% per annum. The value became the lowest ever observed. Russian banks are closely monitoring changes in the key rate of the regulator and, on the basis of decisions made by it, independently determine the level of long-term lending rates, including mortgage rates.

At the last meeting on July 24, the Bank of Russia lowered its key rate to 4.25% per annum - this is the lowest level in the entire post-Soviet period. As a result, by the end of the year, the average mortgage rate may drop below 7-7.5% per annum. This is the opinion in an interview with RT, real estate market expert of the Academy of Finance and Investment Management Alexey Krichevsky.

“Already now, a number of banks have reduced rates on preferential mortgages to 5%, and in some cases the indicator has dropped even lower. In general, the trend towards lower rates will increase the demand for both new buildings and the secondary market, ”the expert notes. 

Despite the high likelihood of a reduction in the cost of housing loans, analysts do not expect an increase in the cost per square meter in Russia in the near future. After the abolition of the quarantine, in an attempt to make money on the deferred demand, developers have raised prices for finished housing by about 5-8%, depending on the object, says Peter Pushkarev. At the same time, the excitement will decrease in the fall, which will put some pressure on prices.

“The stabilization of demand will cause an oversupply in the real estate market, which will force developers to regulate the value of their properties in order to keep sales at a high level. As a result, within a few months apartment prices may drop by about 10%, ”the expert concluded.