The head of the Ministry of construction expects a significant increase in demand for mortgages at the rate of 8.5%

MOSCOW, August 2. /TASS/. The Minister of construction and housing Russian Mikhail Men expects significant strengthening of demand for mortgage at decrease mortgage rates to 8.5%.

He declared on Wednesday on air of TV channel of RBC.

“The mortgage rate is directly tied to the key rate of the Central Bank, therefore, we look with hope to the gradual reduction of the key rate. According to experts, if the 8.5% is the mortgage rate, then the psychological barrier will be broken very seriously, and people will be more actively pursued in the mortgage”, – he said.

Men expressed confidence that banks would continue to lower mortgage rates following the reduction of the key rate of the Central Bank.

In may 2017 the rates of delivery of mortgage fell to a record level in history: an average of 11.3% in the primary market, at 10.9%, the secondary market is 11.5%. This trend continued in June – July 2017 – leading banks continued to lower their rates, the Agency for housing mortgage lending for the first time in history established a definite (9,75%) interest rate for a wide range of market borrowers.

Not ruled out the slump in housing

Men also noted that the law on the state compensation Fund of shared construction can lead to temporary drop in volumes of commissioned housing in Russia. In his opinion, the decline will be temporary and at the end of the transition period, which will last a year, will be replaced by growth.

“This is due to the fact that people, when they realize that their investment in the construction of equity protected by the state, not the insurance companies, who, unfortunately, has not shown its efficiency in this work, then people will have a certain courage when making decisions in the family tips for investment in share construction. And it will have its effect over time,” explained Men.

To establish a compensation Fund of shared construction requested the President of the Russian Federation Vladimir Putin at the state Council building in may 2016. Then it was emphasized that the Fund needed to protect the rights of shareholders in difficult market conditions.
This mechanism will replace the insurance system contracts equity because it was found to be ineffective. Initially the Fund was supposed to begin its work on 1 January 2017, but in the end, the authorities decided to modify together with developers of the bill and to postpone date of launch.

A Fund should be established immediately after the signing of the law. When there is a transition period until July 2018.