Mortgage issuance in May increased by 10% before the end of the preferential program, According to VTB’s forecast, in the first month of summer, sales on preferential mortgages for new buildings may increase by almost a third
According to the preliminary results of May, mortgage issuance in Russia as a whole increased by 10% compared to April and amounted to 510 billion rubles. The acceleration of sales is due to the end of the preferential program for new buildings at 8%. Such data is contained in the VTB study. Compared to last year’s May, mortgage issuance decreased by 13%, analysts say.
In total, according to the results of five months, Russians took about 2 trillion rubles for the purchase of housing. This is 17% less than in the comparable period of 2023.
VTB associates the growth by April with the imminent completion of a mortgage with state support at 8%. “A significant number of borrowers decided to enter into a deal as soon as possible in order to have time to buy an apartment in a new building on preferential terms. According to our estimates, in May, market sales under this program will amount to about 110 billion rubles,” explains Sergey Babin, head of the VTB Mortgage Lending Department. At the same time, a surge in demand is expected in June, he continued. According to the bank’s forecast, in the first month of summer, sales under this program may increase by almost a third compared to May values.
VTB itself issued a mortgage for 531 billion rubles in five months, which is almost a quarter higher than the same results last year. The bank explained this dynamics by an increase in borrowers’ demand for government programs since March. About 70% of the bank’s mortgage transactions during this period fell on preferential programs. Most often, borrowers took out a family mortgage (212 billion rubles), followed by a mortgage with state support (109.2 billion rubles). The top three are completed by the IT mortgage (74.0 billion rubles).
The Central Bank also notes the increased demand for preferential programs against the background of the imminent completion of mortgages with state support. According to the regulator, in April 2024, the issuance of this program amounted to 110 billion rubles. This is 15% more than the March figure (95 billion rubles).
Sergei Pakhomov, Chairman of the State Duma Committee on Construction and Housing and Communal Services, recently said that in the next month or two conditions for preferential mortgage programs for the next five years will be formed. According to him, government programs will become targeted. “But in general, this door called “preferential mortgage” is being closed. What will happen next? Well, it’s obvious, there will be a decline in demand for six months or a year,” said Sergey Pakhomov.