On Saturday, December 23, a government decree came into force in Russia to change some parameters of preferential mortgage programs. The document was approved by the Cabinet of Ministers at the end of last week and published on the official Internet portal of legal information.

"The new resolution has increased the contribution to 30% on preferential mortgages, which are issued at a rate of 8% per annum for the purchase of housing in new buildings, the construction of a private house or the purchase of a land plot for its construction. This measure is aimed at improving the quality of loans. The maximum size of a preferential mortgage loan for all regions, including the capital, is now 6 million rubles," the Ministry of Finance of the Russian Federation explained.

Today, preferential mortgages allow all residents of the country to apply for a loan for the purchase of housing at an interest rate half the market rate (now it exceeds 16% per annum). The program is valid until July 1, 2024. At the same time, until now, the minimum down payment was set at 20% of the cost of housing, and the maximum loan amount for the purchase of real estate in the Moscow and St. Petersburg agglomerations was 12 million rubles.

According to experts, the decision of the Russian leadership to tighten the terms of the program is designed to weed out unreliable borrowers and prevent a possible overheating of the market. In addition, due to the expected decrease in the issuance of preferential mortgages, the authorities are trying to ease the burden on the federal budget.

"The innovations will cool down the rush demand, which has become one of the main reasons for the increased difference between the cost of new buildings and secondary housing in recent years. The Ministry of Finance is trying to stabilize the real estate market and at the same time reduce budget spending to finance the program, so it was decided to raise the entry threshold by increasing the down payment," Valery Tumin, director of the Russian and CIS markets at fam Properties, explained to RT.

Recall that the preferential mortgage program was first launched back in 2020 to support the demand for real estate during the pandemic. As Bank of Russia Governor Elvira Nabiullina noted earlier, the initiative turned out to be useful at the first stages, but later led to a rapid rise in the cost of new buildings and, as a result, a serious price gap in the primary and secondary housing markets.

So, according to Rosstat, if at the end of 2019 a square meter in a facility under construction was sold for an average of 64 thousand rubles in the country, and in the secondary market for about 59 thousand rubles, then by October 2023 the values increased to 134 thousand and 95 thousand rubles, respectively. Thus, in just a few years, the difference between the cost of housing in the primary and secondary markets in Russia has more than quadrupled, from 9% to 41%.

"The problem is that developers cannot quickly increase the volume of housing under construction and the explosive growth of mortgages largely goes into rising prices. On average in the country, prices for new buildings have increased by 90% in three years, that is, they have almost doubled. This is twice as much as the increase in the average salary in the same three years... Broad preferential programs are, of course, very useful as a temporary anti-crisis measure if demand is sharply declining. But in the future, it is advisable to switch to targeted programs," Nabiullina said on November 16 in the State Duma.

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The head of the Central Bank considers a family mortgage to be one of such targeted programs. Under its terms, Russians with one child born after January 1, 2018, as well as parents who have at least two children under the age of 18, can apply for a loan for the purchase of real estate at a reduced rate of 6% per annum. Moreover, residents of the Far Eastern Federal District have the opportunity to take such a loan at 5%.

The initiative is also valid until the end of June next year and is in great demand among Russians. At the same time, against the backdrop of tightening preferential mortgages, the government, on behalf of President Vladimir Putin, did not change the parameters of family mortgages.

So, the minimum down payment on it is still 20%, and you can take a loan for the purchase of real estate worth up to 12 million rubles in the Moscow and St. Petersburg agglomerations and up to 6 million rubles in other regions of the country. Moreover, at the moment, the country's leadership is discussing the possibility of extending the program after July 1, 2024.

"In many ways, this is a political move. The authorities are trying to support the birth rate and provide support to parents, and family mortgages are just one of such measures that allow Russians with children to improve their living conditions," Oleg Samoilov, vice president of the Russian Guild of Realtors, said in an interview with RT.

In favor of the regions

In addition to preferential mortgages, the conditions of the Far Eastern and Arctic programs have changed in Russia since December 23. The maximum loan amount for them was increased from 6 million to 9 million rubles.

It should be noted that both initiatives allow young families, as well as employees of medical and educational organizations in the Far Eastern Federal District and the Arctic zone of Russia, to apply for a housing loan at 2% per annum. Banks will issue mortgages on these terms until the end of 2030.

Borrowed money can also be spent on the purchase of finished housing or real estate in a facility under construction and on the construction of a private house on your own or under a contractor agreement. In addition, program participants can purchase secondary housing in rural areas and single-industry towns in the Far Eastern Federal District and the Arctic zone.

"The credit limit on Far Eastern and Arctic mortgages has been increased due to the rise in the cost of housing in these territories. Today, it is quite difficult to buy a good property here for 6 million rubles, so realtors began to offer buyers gray schemes, which increased the risks for potential customers. Now the maximum loan amount has been increased, and people have more opportunities to improve their living conditions," Irina Radchenko, vice president of the International Academy of Mortgage and Real Estate, explained to RT.