The average rate on mortgages has grown to 18-20% per annum, and in some cases up to 25-28%, said the head of the mortgage center of FGC “Leader” Pavel Timoshenko, the Director of the Department of the secondary market of “Incom Realty” Sergey Shloma told that banks have tightened credit conditions.
MOSCOW, 22 Dec. Forecasts fall in 2015 in the volume of mortgages at four times fortunately not come true, but at the end of the year the volume of mortgage lending will be less than in the previous year — the decline will be about 35-40%, says experts interviewed. They also note that if in the beginning of the year the market is virtually stagnant and practically new applications were not accepted, with the introduction of the program of subsidizing mortgage rates, as well as a reduction of interest rates by banks, the situation in the segment have stabilized.
Cold winter 2015
A year has passed since the moment when the Central Bank raised its key interest rate to 17% — on 6,5 percentage points freezing, in fact, the mortgage market after the New year, remember the experts interviewed by the Agency. “The market froze, new mortgage applications are practically not moved, and the issuance were inertial, the decisions that were taken in 2014”, — tells the Deputy chief of management of development and support of credit products of mortgage crediting Department of “VTB 24” Mikhail seroshtan.
Although, as remarked head of the mortgage center of FGC “Leader” Pavel Timoshenko, the high demand for the property the end of 2014, including mortgages, caused by the fluctuation of exchange rates and a sharp increase in the key rate of the Central Bank, continued in January, as approval some banks at low interest rates was still in force. “In January signed credit agreements, approved in December, is still on the old rate of on average 13.5 per cent,” explains commercial Director of SDI Group Raisa Manashirova. In addition, the demand provided and buyers who were in a hurry to buy a property to invest, but expected in a very short time to repay the loan.
Quantitative indicators of issue in the first months of 2015 showed a small decrease relative to last year, but still far from the “zero” value, said the Deputy chief of Department of retail products and processes Gazprombank Julia Elsukova. So, according to the official statistics of the Central Bank, only in Russia in the first three months of 2015 issued 138,9 thousand rouble mortgage loans, while for the same period last year — thousands of 208.3. Moreover, if to compare dynamics of issuing foreign currency mortgages in the first three months of 2015 from the same period last year, we obtained 42 credit against 229.
What new mortgage programs a large number of transactions can not wait, it became clear in February, Tymoshenko said. The average rate on mortgages has grown to 18-20% per annum, and in some cases up to 25-28%. Banks set rates in the barrier waiting for decisive action from the government, Tymoshenko adds. “Borrowers were not ready to take loans even with a minimum margin of 15-16% per annum. Mortgages took a unit, and in this case we are talking about extremely low among the total number of transactions at the level of tenths of percent”, — says Director of mortgage branch GK “MITS” Konstantin Sobecki.
“At the moment predicted three to four-fold reduction in the volume of mortgage lending in 2015”, — seroshtan says. According to him, some borrowers had to postpone home purchase until better times. In the first quarter of 2015 have been issued mortgage loans worth 218 billion rubles, which is 35% below the level of January-March 2014, said Director of sales Department GK “Granel” Rustam Arslanov.
The engine of the market
Run the program of preferential mortgage allowed under unstable economic conditions to preserve housing affordability for customers and to support the entire construction industry, says Deputy General Director “Morton-invest” Igor Shipenkov.
The program was finally agreed upon in March. The interest subsidies from the Federal budget allocated 20 billion rubles, which is expected to provide loans worth up to 700 billion rubles.
By the end of the first quarter about the launch of the programme with government support announced eight commercial banks and the Agency for housing mortgage lending through its partner banks, said Litinetskaya. “Sberbank’s share in the program of state support exceeds 70%, the share of “VTB 24” — 21%. For all other participants, including such relatively large banks, such as Gazprombank, “Saint Petersburg”, “Delta-the Credit” remains less than 10%”, — said earlier in an interview with the senior Vice President of the Bank “VTB 24” Andrey Osipov.
In General, the experts, as has been said, noted the positive impact of launching a preferential mortgage on the market of new buildings. “With the program the market rallied, and the number of mortgage transactions began to grow,” explains Sibrikov from “Morton-invest”. The program went into full effect, and a return to pre-crisis levels by the share of mortgage transactions, for example, in “NDV-real Estate”, recorded in early July, said the head of the Department of mortgage and loans company Christina Shulgin.
People almost immediately showed a lively interest in preferential mortgage loans. Many buyers were ready to purchase a house and waited until work the program. For other discounted rate proved to be strong incentive to decide on the purchase, said the Director of marketing and advertising development company “city-XXI century” Marina Timashova. Now the share of mortgage transactions in the primary market from “economy” to “premium” in the aggregate is about 70%, draws the attention of the head of the sales Department OPIN Natalia Nemchaninova.
In the first 9 months 2015 the volume of mortgage loans in the country reduced only by 38% compared to the same period in 2014, says seroshtan of “VTB 24”. Although, he repeats, in early 2015, most experts predicted no less than a fourfold decline in the issuance of mortgages and virtually complete stop of the market in the segment of crediting of new buildings.
“The share of loans under the program of subsidizing mortgages for the period of its implementation, has reached 40% of total mortgage issuance, and provided the necessary support to the housing sector,” — says the expert. “By December, rates start at 10.9 per cent,” said managing partner of “Metrium groups” Maria Litinetskaya, adding that nowadays “primary” lending under 10,9-14%.
A gradual decline
The beginning of 2015 was a period of shock reactions and for mortgages in the secondary market, says the Director of the Department of the secondary market of “Incom Realty” Sergey Shloma. According to him, customers behave differently — about half mortgage buyers, who were preparing for the deals, agreed to new conditions — at an increased rate, as a rule, in a situation when out on the signing of the Treaty had not today or tomorrow, the rest refused or had suspended preparations for the transaction.
In late January the minimum mortgage rates on the secondary housing market amounted to 14.5%, leading banks offered loans on the terms of 16-17%, a number of banks put frankly prohibitive rates, effectively demonstrating the reluctance in the situation to work with a mortgage.
“In General, banks dramatically tightened lending conditions — increased the amount of the initial contribution, increased requirements to borrowers, practically wrapped-up the program of loyalty to clients,” says Shlomo, adding that customers have responded to these measures severely. So, in April, when he finished the work on deals that began in late January-early March — in “Inkom” the number of mortgage purchases in the secondary market has decreased in 3 times relative to the same period last year.
During the year, the Central Bank was consistently reducing its key interest rate. In particular, in early August, the regulator lowered its key rate to 11% per annum, that its value is valid to this day. In the spring in response to successive actions of the regulator on the liberalization of the credit policy of the banks began gradually to soften the terms of lending on the primary market and the secondary. On the one hand it has encouraged more potential buyers, but on the other, the systematic reduction of the key rate has formed a pent-up demand — people are actively monitoring the situation but have not entered the market, patiently waiting for mortgage rates moving even lower. “From the beginning, major banks lowered the average rate on the basic programs on the secondary market at 3-4 percentage points,” says Shlomo.
Early fall was a turning point in customer behavior — including in the mortgage market. “In October our company was first recorded positive dynamics in the number of mortgage transactions in the “secondary market”, — said the representative of Incom.
November loans have become cheaper, the average weighted rate made 12,89%, draws the attention Litinetskaya. According to her, now “secondary” is credited under 13-14%, while loans for housing under construction are issued under 10,9-14%. Shlomo notes that it is now, it is not about restoring pre-crisis levels. According to the company, at present, only every fourth transaction in the secondary housing market is happening with attraction of credit funds. “In 2014, the share of these transactions in different months ranged from 33-40%,” he notes.
The General condition
In connection with the slowdown in new issuance in 2015, a decrease of volume of issuance. As of 1 November 2015, according to the Central Bank, issued in rubles 539,9 thousand mortgage loans totaling 884,6 billion. While last year in the first 10 months of credits issued 836 thousand to 1.4 trillion rubles. While foreign currency loans were granted only 118 compared to 701 for the same period in 2014. Against this background, there is an increase in the volume of bad debts and their share in the loan portfolio, believes Elsukova from Gazprombank.
“Despite the credit squeeze, the pace of growth of overdue debts of individuals in the segment of mortgage lending to banks reached its record level for the year she will grow more than 32,49% by the end of 2015 62 billion rubles,” — said the President of “Sequoia Credit consolidation” Elena Dokuchaeva. According to the company, each 25-second mortgage loan is overdue. Last year the percentage was somewhat lower — one in 30 credit was late.
But, according to Dokuchaeva, the increase in arrears due to several factors. First of all, it reduced real disposable incomes amid the deteriorating macroeconomic situation. “It is impossible not to take into account also the serious fluctuations of the exchange rate and the weakening of the ruble — the reason for this primarily relates to foreign currency borrowers. Now the debt in the mortgage portfolio in arrears for loans granted in foreign currency have 39,15%”, — says the expert.
At the beginning of the year it was about 30 thousand currency “of food”, brings the data of the Central Bank, the activist of the all-Russian movement of currency borrowers Irina Safanova. According to her, currently, for many loans are the processes someone goes to refinance debt, but there are also those who have solved their problems through the sale of collateral apartments, or otherwise.
In addition, it is impossible not to take into account the growth of inflation in Russia in stagnating wages. By the end of 2014, inflation was 11.4%, the forecast for 2015 is 11.9-12%.
Hopes and expectations
Speaking about the year 2016, according to the optimistic forecast assuming extension of the state program of the mortgage market will gradually recover next year, banks will give out credits to physical persons for purchase of housing by 1.3-1.4 trillion rubles, which is below 2014 26%, says Dokuchaev. But still the growth of the mortgage market to the indicator 2015 can be 15-20%, predicts the Deputy Chairman of the management Board of the Bank “DeltaCredit” Irina Aslanov.
According to head of mortgages and special programs Tekta Group Novel Stroilova, if the extension does not take place, then the market will be thrown back to the beginning of 2015. “The situation is quite risky. I wish all extension programs of the state support but the decision, apparently, is not accepted”, — said the expert. In the present situation the extension of the program of subsidies for the market it is necessary, says the Director of marketing and advertising development company “city-XXI century” Marina Timashova.
“Unprecedented low interest rates on loans, which in the market since 2008, “pushing” people to the deal. Even if rates return to pre-crisis 14%, the first time, customer churn is inevitable. People who failed to take the credit with state support, will likely want to wait — “maybe favorable rates will come back,” adds the head of the mortgage centre Est-a-Tet Alexey Novikov.
According to Seroshtan of “VTB 24”, the initial pessimistic forecasts did not come true, and by the end of 2015 the volume of mortgage lending will be less than in the previous year, but not more than 35-40%.
“In current conditions it is a very good result”, — said the expert. Interest rates on mortgage loans to date have stabilized and in the next six months will not change significantly, although this depends on the state in the economy and, as a consequence, actions of the Bank of Russia in respect of the trend in the reduction of the key rate”, — sums up the expert.