Earlier, on the sidelines of the Russia exhibition and forum, Deputy Prime Minister Marat Khusnullin told reporters that the Russian authorities plan to increase the down payment on preferential mortgages. “We have a large volume of mortgage origination and we are still looking at how we can regulate the volume of mortgage origination before June 1,” Khusnullin said. The deputy prime minister added that this year the growth of the mortgage portfolio will be more than 3.5 trillion rubles.
According to Oleg Repchenko, director of the analytical center “Indicators of the real estate market IRN.RU”, the authorities are now looking for a way to carefully complete the large-scale program of preferential mortgages, because in conditions of a high key rate, subsidies mortgage rates for everyone it puts a lot of pressure on the budget.
“It is impossible to abruptly reduce preferential mortgages, the market is too “hooked” on subsidies: demand will fall sharply, sales will come to a standstill. Therefore, the authorities are gradually “tightening the screws” so that the real estate market separates of prolonged preferential state programs and learns to live without artificial demand support,” Repchenko explained.
The government already increased the minimum down payment on a state-supported mortgage to 20% in September, he recalled, and this was one of the factors that reduced demand for new buildings in October. In Moscow, for example, the number of preschool children in the primary market decreased by 11%, according to the capital’s Rosreestr.
According to Repchenko, in the near future the initial payment will not be able to increase more than 5%, because the main leitmotif is precisely the gradual liquidation of preferential mortgages. That is, with a high degree of probability, the down payment on a prime mortgage can increase from 20% to 25%, says the expert. But in general, if we ignore the current state of the market and look at mortgages philosophically, then a 30% down payment is considered classic as well. Therefore, Repchenko admits that in the future the down payment on a prime mortgage will increase to 30%, but the bar is unlikely to be higher.
Increasing the down payment to 25-30% alone will not radically affect the real estate market, but it will work in combination with other factors, the expert predicts. “An increase in the down payment on prime mortgages, an increase in minimum rates, the introduction of prohibitive surcharges on risk ratios for mortgages with a low down payment and for highly leveraged borrowers – all this together can seriously suppress effective demand. This will force both developers and private sellers to reduce prices,” Repchenko is sure.
In turn, the general director of NF, Dom Natalya Sazonova, noted in a conversation with RG that mortgage support is produced by subsidizing the difference between the market rate and the preferential rate with budget funds. As the key rate increases, the burden on the budget becomes increasingly significant.
Sazonova stressed that now the conditions for granting mortgages are increasingly complicated and document controls are stricter. In her opinion, by the summer of next year, various support programs aimed at certain segments of the population will probably be in operation. “In particular, family mortgages and information technologies will be maintained; programs will be developed for certain categories of citizens, for example, teachers, doctors, military personnel,” Sazonova summarized.
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