22 Dec the seller published a report on the state of the mortgage market, according to which in January — November 2016, Russia had issued 756 thousand loans of 1.3 trillion rubles, the volume of loans increased compared to the same period last year by 31%. On the same day, market leader Sberbank, which accounts for more than half of the issued mortgage loans, revealed their statistics for the same period: the number issued by Sberbank of mortgage loans in January—November rose at an annual rate of 11% to 419 thousand in cash — 10% to 636 billion rubles.
And AIZhK and Sberbank attribute the increase in the issuance of a decline in mortgage rates, which, according to their estimates, have returned to pre-crisis level. In 2016, the banks repeatedly lowered interest rates on mortgages. Sberbank, in particular, was lowered three times.
“In the fall, the average decline in interest rates was 0,45–0,55 p. p. market segment of the mortgage in the secondary market to loan at rates ranging from 11.9%, and this level at the start of 2014,” the report said AHML. According to the Agency, in the primary market with government support to obtain a loan at a rate of 10.9 per cent (the rate of the seller taking into account the additional deductions begin from 10.5% per annum).
“The market continues to recover, [mortgage] rates have returned to pre-crisis level. In the case of mortgages to young families rate [Sberbank] is even lower — from 10 to 25%,” — said the Director of retail ntransactionid products Sberbank Natalia alymova at a joint press conference of Sberbank and the Ministry of construction and housing. According to her, to level the beginning of 2014 approaching and the volume of mortgages on the secondary market (+20% compared to 11 months last year).
Bet on the crisis
Statement on the return of mortgage rates to pre-crisis levels or even lower is confirmed by many players from the top 10 by volumes of mortgage portfolio (according to Frank Research Group rankings). Rates in the primary market in the fall, and all fell to levels below the beginning of 2014, say Deputy Chairman of the management Board of Absolut Bank Tatiana Ushkov, and senior Vice President, Director of mortgage crediting Department of VTB 24, Andrei Osipov.
“The most popular mortgage rate on the primary market is now at 10.9%, but there are also offers lower”, — agrees the Director of the Department of retail business of Bank “the Renaissance” Oleg Korkin. Confirm the trend of lowering interest rates to pre-crisis levels in Transcapitalbank, Raiffeisenbank and Russian agricultural Bank.
To receive comments in other banks of the top 10 (Svyaz-Bank, Gazprombank and “DeltaCredit”) failed.
According to the company “CYANOGEN Groups” (owns the largest database of sale and rental of real estate) in 2016 “transition values mortgage rates in relatively comfortable for the borrowers area (below 12% for new buildings and below 13% in the secondary market) has become one of the key incentives for the development of the market.”
Government support optional
The achieved level of interest rates, according to bankers, reducing the importance of such factors ensure that demand for mortgages, as state support. Although the subsidy program mortgage, launched in March last year to help citizens in the purchase of housing after a sharp rise in interest rates on loans (due to the increase in the key rate in December 2014 to 17%), ceases to have effect from the beginning of 2017 and the decision about the renewal is still pending, it will not have a negative impact on the mortgage market, as market rates approached the level laid down in the program.
“The achieved level of interest rates — in the region of 12% — quite comfortable for the customers. People at this level of rates took a large amount of credits in 2013-2014, and this rate is not a significant limiter”, — says Andrey Osipov from VTB 24. In 2016, the mortgage with state support accounted for a large part of loans in the primary market.
Prolonged decline in the
The participants of the mortgage market do not exclude that in 2017, the downward trend in rates will continue. “Mainly due to the possible reduction of the key rate of the Central Bank, — said Osipov. — Although the decline [in mortgage rates] will be smoother than in 2016 — not more than 0.5–1 percentage point”. Agrees with him Tatiana Ushkova from Absolut Bank.
“We expect that the Bank of Russia will lower its key interest rate to 1.5% in 2017. The same size decrease mortgage rates everywhere, however, will not. The situation will depend from Bank to Bank, particularly on their ability to attract cheap long money from the credit risk and automate the process of granting housing loans. But in any case, mortgage rates will decline,” — said the head of credit products Raiffeisenbank Andrey Morozov.
Further rate cuts in 2017 after a possible reduction of the key rate of the Central Bank expects the Director of the Directorate of mortgage lending of Transcapitalbank Vadim Paharenko. But, in his opinion, due to the termination of the program rate in the beginning of the year can briefly grow by 0.5–2 percentage points from current levels. Similar opinion is shared by Oleg Korkin of “Revival”. “The same “primary,” fell due to the state program to support the mortgage market. Therefore, if the program is not renewed in 2017, the rate on the primary market will automatically rise to 11.5–12% in early 2017,” he said.
The price factor
The decline in mortgage interest rates may partly offset for home buyers by increasing its value, warns the Director of the Department on work with partners of the savings Bank Nikolay Vasev. According to him, the decline in mortgage rates will lead to increased demand and, as a consequence, increase the developers of housing prices.
Sberbank is is watching the trend of increase in apartment prices in the whole country since September, said Vasev. “If all goes as goes, it is quite possible that the trend will continue,” he said.
Expects growth of housing prices in 2017 and the Ministry of construction. As explained by Deputy Minister of construction, housing and utilities Nikita Statesin December 22, the cost per square meter has been removed is passed on to the buyer costs by state support in terms of infrastructure, but more potential for reduction of prices on housing there.
Price growth forecasts and Ushkova from Absolut Bank. “The cost of housing, to surrender in 2015-2016 are estimated before the crisis. All new objects that will be commissioned in 2017-2018, the cost is higher. Prices rose all the rebar, cement and so on. The cost per square meter will be higher for objective reasons,” she explains.
Moreover, adds Ushkova, in 2017 is expected to reduce the amount of new apartments. According to Staresina, this year it was housing a total area of over 60 million sq. m. “In the program of the Ministry of construction laid decrease in 2017 and only in 2018 is expected to increase. The reduced input due to the fact that from-for crisis many projects of major developers have been suspended and 2017 they are going to decide to defrost or not,” she explains.