The termination of mass preferential mortgages will temporarily reduce the demand for housing. However, this will not affect developers in any way, according to the Central Bank’s financial stability review.
Konstantin Aprelev, Vice President of the Guild of Realtors of Russia, explained in an interview with the Free Press: if we assume that the massive preferential mortgage, which is not targeted, but extends to the entire market of new buildings, will be discontinued, then this can be supported.
“Any preferential and budget-funded targeted programs should either be limited in time if they are not targeted, or be exclusively targeted to support certain categories of citizens or territories. There should be precisely strategic goals, objectives and grounds for economic efficiency and expediency,” the source said.
Recently, the Ministry of Finance proposed to raise the family mortgage rate for certain categories to 12%. We are talking about families where both children are over six years old. If there is at least one — under the age of six — everything remains the same.
In its current form, under the program, a loan for the purchase of housing at 6% per annum and with an initial payment of 20% can be taken by families where there is at least one child born from January 1, 2018 to December 31, 2023; families with two children under the age of 18, families with a disabled child.
According to Aprelev, a single rate for a certain separately selected category would be a good option for an addressable mortgage. For example, there is one rate for IT workers, another for health workers, a third for teachers, and so on.
“A separate rate for young families and families with children. A separate one is in the territories, because they themselves can additionally subsidize the mortgage rate at the expense of their budget. Targeted programs affect different market shares, so I would consider different interest rates,” said the vice president of the Guild of Realtors.
The expert stressed that it is wrong to rely on different ages of children and provide for different mortgage rates. The defining word here is “children, no matter what age.”
“It seems to me that this is a very far-fetched story, which, in general, does not lead to the correct fulfillment of the obligations assumed by the government and the budget. But what would be great for sure is if all targeted programs were not only preserved, but also spread to the ready—made housing and residential housing market,” concluded Aprelev.
Earlier it became known that the demand for small-sized apartments in Russia has fallen, and the share of single-family homes in the secondary market that purchase mortgages has decreased by 1.5 times.
Mortgage
The expert told why housing prices will not rise due to the cancellation of the preferential mortgage program
The Ministry of Finance explained in which case it is possible to increase the family mortgage rate to 12%
Average mortgage rates in Russia have increased for the first time since the beginning of the year
In Russia, mortgage issuance has fallen by almost 40 percent
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