Mortgages are one of the reasons for the warming up of the economy, so the government is trying to curb credit demand for housing, the president noted
Experts from the economic bloc, including the Central Bank, believe that the mortgage lending market in Russia is now overheated and has an impact on inflation. This was stated by Russian President Vladimir Putin.
“One of the key things is, of course, housing. You can see what’s going on. Experts of the economic block, the Central Bank, believe that our market is overheated, mortgage capital. This may negatively affect inflation, and, accordingly, forces the Central Bank to keep a high key rate. Everything is so interconnected,” Vladimir Putin said at the congress of the Russian Union of Industrialists and Entrepreneurs (RSPP).
“Mortgages are one of the reasons for the warming up of the economy, which is dangerous, according to some experts. Therefore, the government is trying to restrain mortgage lending in order to normalize the situation as a whole, including in the near future with a key rate,” the president added.
The central bank has repeatedly stated signs of overheating in the mortgage lending market. High rates of housing lending, including through massive preferential programs, led to a strong increase in housing prices, the regulator pointed out. Last autumn, the head of the Central Bank, Elvira Nabiullina, announced a “glaring imbalance” in prices for secondary and new buildings. According to the regulator’s estimates, in three years new buildings in the whole country have almost doubled in price, and the price gap with the secondary market has grown from 10% to 42%, the head of the Central Bank noted.
Recently, Elvira Nabiullina, speaking in the State Duma, said that Russian developers have accumulated a financial cushion over the four years of the mass preferential mortgage (the program “State Support 2020”) and will be able to withstand the decline in housing prices.
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