The market, we have a cancellation! What awaits buyers and developers of housing in St. Petersburg after July 1

Photo: iStockphoto.com / aapsky

The prospects of canceling state-backed mortgages from July 1, 2024 and simultaneously changing the parameters of a family mortgage cause a certain stir in the primary housing market. Nothing is completely clear about the family yet: it seems to have been extended, but they threaten to keep benefits only for families with children under 6 years old, then they want to reduce the rate only for large apartments. In any case, developers and buyers are not happy about the upcoming changes, and it is obvious that the course has been taken to reduce the number of those who have access to preferential lending programs.

Fontanka, together with the Association of Builders of St. Petersburg, learned from the leading developers of the St. Petersburg agglomeration how important preferential programs are for them and what changes they expect.

They helped — and that’s enough

Everyone predicts the end of the most massive state support program launched during the coronavirus epidemic on July 1, 2024. In principle, there are no expectations that it will remain in its current form.

— Developers advocate the preservation of the program in one form or another, — said Sergey Terentyev, Director of the Real Estate Department of the CDU Group. — In my opinion, the most correct solution would be to make the rate under the program “State Support 2020” flexible, tying it to the key one with a difference of three to four percentage points. So, with a key rate of 16%, the interest rate on a preferential mortgage would be 12-13%. This mechanism would allow the authorities to plan budget expenditures for the implementation of the program, and would give buyers the opportunity to purchase housing at quite reasonable rates. After the transition to such conditions, the sale of housing under construction after a slight recession would be able to recover fairly quickly.

Ekaterina Nemchenko, Commercial director of the RST Holding, recalled that preferential mortgage programs with state support have been a driver of sales throughout their duration and have become a powerful support for the entire construction industry.

— Thanks to them, the purchase of an apartment became available to many citizens of the Russian Federation, which in turn led to increased competition between construction companies and a qualitative leap in the characteristics of residential complexes, — she believes. — Since the end of 2023, there have been regular tightening in the conditions of mortgage programs with state support, with each innovation worsening conditions and limiting the possibilities of buyers of new buildings. The cancellation of the programs will have a negative impact on the market of new buildings, create difficulties with the sale of apartments and affect the financial stability of construction companies.

At the same time, Tatyana Khalilova, director of the GloraX sales department, noted that at the same time, due to increased demand, state-backed mortgages had a significant impact on prices in the primary market.

— At the same time, thanks to the preferential mortgage, many families, including young ones, were able to improve their living conditions, that is, its social impact should not be underestimated either, — she added. — Perhaps it is time to really make the programs more targeted and the government is already on this path — important changes have been made to the rules for issuing family mortgages, the issuance limits have been reduced, the initial payment has been increased.

Jan Feldman, Marketing Director of Lenstroytrest Group,He also notes the side effects of state-backed mortgages: a surge in investor activity due to low mortgage rates has warmed up real estate prices. As a result, buying a home became difficult for those who really needed to improve their living conditions, rather than trying to earn money. Another disadvantage was the sharply increased price gap between the secondary and primary markets, because they are closely interrelated and the most common scheme for purchasing an apartment in a new building is the sale of existing housing.

— I believe that the “State Support 2020” has really exhausted itself, — he concluded. — It is likely to remain in one form or another only in those regions where few new housing is being built. And the authorities are likely to switch to targeted targeted programs for certain categories, for example, doctors or teachers, thus cutting off investors from the mortgage market.

Nikolay Grazhdankin, head of the sales department of Otdelstroy, disagrees with him,who believes that the “State Support 2020” has not lost its relevance, despite the small loan amount. He noted that it would still be enough, for example, when improving housing conditions, when buying a small “starter” apartment, when purchasing housing off-site.

Rustam Azizov, Director of Mortgage Sales and Implementation of financial Instruments at A101 Group, says that even after the tightening of conditions, preferential mortgages account for 30% of loans issued, and until December 2023 it occupied 50-60% of all mortgage loans in Russia.

— This most clearly shows how much this program is in demand, it has definitely not outlived itself, — he is sure. — Another thing is that the transition to targeted support for certain categories of citizens (doctors, teachers, employees of key enterprises) can really solve important government tasks more effectively.

Maxim Turta also believes that the program has not outlived its usefulness: it was she who made it possible to support the market during a difficult period for it: she helped many developers to continue their development, and buyers to purchase real estate on comfortable terms.

According to Olga Kuznetsova, Deputy General Director of the Glavstroy real estate agency, the main advantage of the program is that preferential loan terms are available to all Russian citizens, and a comfortable rate is valid for the entire loan term.

Sergey Sofronov, Commercial Director of PSK Group, believes that the concept of exhaustion can be applied only in the context of conditions: the worse they are, the lower the demand. Therefore, after the deterioration at the beginning of the year, the issuance of loans sank, and by the end of the first quarter began to recover a little.

— If it were not for the preferential mortgage, the market would periodically “get up,” he explained. — After all, the key rate was 20%, and no one takes real estate loans on such terms. That is, the preferential program has perfectly smoothed out the sharp corners of economic policy in terms of buying new real estate.

The second point, according to him, is to stimulate demand, and the third is to stimulate construction in the context of increased demand and, as a result, the development of related industries and labor markets.

— It was during the period of the preferential mortgage that the bar for housing commissioning of 100 million square meters was overcome. m per year, and then 110 million square meters, which is already comparable to the average volume of housing commissioning throughout the USSR in the era of mass housing construction. And now about 9% of all people employed in the economy work in construction,” Sergey Sofronov added.

As for the 1.9-fold increase in prices since the launch of state-backed mortgages in St. Petersburg, he noted that the real impact of mortgage programs on this growth cannot be isolated, as well as the share that accounts for all components of construction: from land and building materials to the cost of servicing loans and social infrastructure.

Less age, more meters

Obviously, changes are also waiting for the family mortgage, the boundaries of which have recently been expanded, and now, it seems, they are going to narrow again.

— The family mortgage became highly in demand after its conditions were improved, and throughout 2023 it occupied a leading position in the sales structure, — says Ekaterina Nemchenko. — Information about its extension is certainly positive, but the new restrictions that its conditions will apply only to families with a child under 6 years old, and other possible restrictions on the square footage of the apartment raise reasonable doubts about the former demand.

According to Jan Feldman, any revision of the terms of this program towards tightening may negatively affect the market: lead to a further decrease in the number of transactions and narrow the possibilities of family citizens to solve the housing issue.

— The ideas of differentiating family mortgage rates depending on the area of the apartment being purchased are more positive. For example, you can reduce the rate by 1 or even 2 percentage points when buying apartments with an area of 60 sq.m. m and more,” he believes. This will further motivate families with children to purchase more spacious and comfortable housing for themselves and significantly reduce the financial burden on such families. Which is especially important when a new child is born.

— All additional limiting factors reduce the range of potential buyers and, accordingly, demand, — agrees Olga Kuznetsova. — But the result of these initiatives will become clear when the conditions of the programs are fully formulated.

Tatyana Khalilova explains that now there is a task to reduce the percentage of borrowers under preferential programs, but at the same time leave them available to cover the social needs of the population. In this light, the decision to leave a low rate for borrowers with children under a certain age seems justified.

— The issue with the area of apartments is quite complicated — in addition to the fact that now there is a widespread trend in the market to reduce the average area of apartments, some customers purchase housing not only to improve current living conditions, but also can make purchases for a child as a reserve for the future, which generally corresponds to the goals of the program, — she added.

Sergey Terentyev says that the logic of the changes under discussion is not fully understood.

— Why should the program be left for people with children under the age of six? Why not before the age of seven or eight? The proposal to limit the minimum area of apartments that can be purchased under this program is also not clear. If the buyer does not have enough savings or income to buy a large apartment on a family mortgage, but only enough for a one-room apartment for his young family, would it really be better if he did not buy an apartment in principle? — he asks questions. — It is clear that the program is a serious burden on the budget and the task is to reduce the amount of expenses, but I would not like to make strange decisions.

In general, the condition for the age of children looks like one of the least controversial among the discussed adjustments, he noted: if the program is available only to people with children under the age of six, then two-thirds of potential family buyers will be cut off from it. Perhaps this is the goal, and in this case the logic of the proposed changes is clear.

— Of course, we are in favor of maintaining the existing preferential programs, but we understand that their cuts are inevitable. The main thing is that they should be reasonable,” Terentyev added.

Sergey Sofronov agrees that it’s all about money — the more loans are issued under preferential programs, the more you have to subsidize from the budget. As this opportunity decreases, there is a need to cool preferential programs.

— Hence such decisions, and they can be evaluated as you like, it does not change the essence: if the budget does not cope, then it does not cope, — he comments. — This, of course, will lead to a decrease in demand for large square footage, for multi-room layouts. In other words, it will worsen the introductory for solving housing issues for families. Artificial restrictions on the minimum area, offhand, will only worsen the situation. Rather, on the contrary, a slight reduction in the interest rate could work, depending on the number of children in the family or an increase in the purchased area.

Maxim Turta, head of the sales department of the Aquilon Group in St. Petersburg and LO, believes that if the changes proposed now are implemented, then another market transformation awaits us. In general, any extension of preferential programs from the state sets up a positive mood.

Rustam Azizov In turn, he noted that at least 60% of families who, in principle, buy apartments with the help of this program, do so not immediately after the birth of a child, but closer to the moment when this child goes to first grade.

— Thus, the likely change in credit conditions for families with children over 6 years of age will significantly reduce the possibilities of the main audience of family mortgage programs and will definitely not contribute to improving demographics — for example, a family that has become much less accessible to a family mortgage in the period it needs will find it more difficult to decide on a second child, — he stressed. — Therefore, this measure seems impractical, but such a restriction for families in which a child has turned 16 years old can really offset the use of a family mortgage for investment purchases.

A 100% mortgage%

The concern of developers is primarily related to the fact that most apartments in new buildings are purchased not just with a mortgage, but with the use of preferential state programs, especially after the increase in the key rate.

Thus, by the end of April, the share of mortgages in Glavstroy St. Petersburg transactions amounted to 89%, of which 43% were purchased under the state support program, 42% – on a family mortgage, 11% — on IT and another 4% on a military mortgage.

— Traditionally, consumer activity in the mass market segment is always pronounced before global changes in mortgage programs, – comments Olga Kuznetsova. — We are already recording an increase in purchase orders. I believe that buyers will be active until the end of the program. It is also discussed in the market that the Central Bank considered the possibility of increasing the key rate to 17%. All these factors will push buyers to solve their housing problem.

— After the introduction of significant restrictions on state support (an increase in the initial payment, a reduction in the loan amount to 6 million), the family mortgage has pulled ahead, — says Nikolay Grazhdankin. — In 2023, the distribution of preferential programs was as follows: 60% state support, 20% family mortgage, 20% mortgage for IT specialists. In 2024, preferential programs are already distributed in a different way: in the first place with 24% family, 30% each from state support and IT mortgages.

Rustam Azizov added that now mortgages with various forms of state support account for more than 90% of all mortgage loans. “The share of IT mortgages is growing, which now stands at about 10%, as well as military mortgages — although its share is about 3%, this is a significant increase even compared to 2023,” he added.

Sergey Terentyev estimates the share of preferential mortgages in the total volume of mortgage loans issued in the mass segment at 97%. “This is due to the cost of real estate in the mass market, due to which almost any purchase falls under one or another preferential mortgage program,” he believes.

— Today, the share of mortgage transactions in our company reaches 90%, of which 90% are in preferential programs with state support, — confirms Jan Feldman. — At the same time, we additionally subsidize rates within the framework of our own promotional offers. One of the main tasks for us is to maximize the availability of the down payment and make payments comfortable during the construction of the house.

In Lenstroytrest, the share of mortgages with state support is 38%, family — 44%. At the same time, according to the results of last year, the ratio was different: state support accounted for 55%, family support — 35%. According to Jan Feldman, it is obvious that the redistribution occurred as a result of the tightening of the conditions for issuing preferential mortgages in December last year.

— In April, all mortgages issued for residential real estate in our projects are state—supported programs, — says Sergey Sofronov. — This is a regular preferential, family and IT mortgage. Sales in their volume are comparable to March and it is clearly visible that the share of mortgages has decreased in favor of installments. The latter now accounts for 18% of transactions. Everything else is a mortgage and “direct” money.

He said that in the structure of transactions, from March to April, the reduction in the share of mortgages looks like this: comfort class – from 81 to 72%, premium real estate — from 27 to 16%. In apartments where there is no preferential mortgage, there is also a reduction, from 10 to 6%. In turn, the family mortgage accounted for exactly half of these loans. The IT mortgage has grown to 40%, and the usual preferential mortgage has decreased to 10%. “This distribution is the first time in our practice,” Sofronov comments. — Before that, the IT mortgage took the third place with a share of 24%. In general, this is natural: demand has been redistributed to those programs where conditions are better.”

The share of mortgage transactions in the total sales structure of RTI was 80%. According to Ekaterina Nemchenko, the most popular program for the purchase of comfort class apartments was a family mortgage, its share amounted to 35% of the total number of mortgage transactions. A significant share of 25% is occupied by IT mortgages.

— As part of our sales, in fact, the top mortgage program is a family one, its share is more than 50%, — continued Tatyana Khalilova. — The next most popular state program, about 24%. The IT mortgage is also quite popular, its percentage is more than 20%.

Variations in indicators between companies are insignificant.

— At this stage, the share of preferential mortgage programs is at the level of 80%, — says Maxim Turta. — About 45-50% of them are mortgages with state support, 30-35% are family mortgages. The remaining 20% is IT and other programs.

To sell something unnecessary…

Another issue under discussion is preferential programs for the secondary housing market. According to Tatyana Khalilova, the primary and secondary markets are closely linked, as buyers often sell existing housing in order to improve living conditions and purchase a new building.

— However, it is unlikely that preferential programs for the secondary market will appear on the market, — she believes. — In the case of the primary one, we are talking about supporting not only developers, but also an important sector of the economy — construction companies, contractors, banks, manufacturers of materials and so on. In the case of the secondary market, only the seller and the buyer receive support.

— As soon as preferential programs are expanded to the secondary market, the primary market will be under threat, — Maxim Turta is more radical. — There are a lot of low-budget housing on the secondary market, which will tilt the choice of buyers in favor of buying a ready-made apartment, but at the same time their standard of living will not be as comfortable as in new complexes. By the way, developers can use preferential programs for rented housing during its initial sale. Therefore, the objects in our rented houses, which could be considered a secondary market, are sold using preferential mortgages from banks.

Sergey Terentyev He believes that when extending benefits to secondary housing, it is unclear what purpose the state would pursue:

— For individuals, the possibility of purchasing ready—made apartments with the help of a preferential mortgage is still available – in rented houses from the developer. In this regard, the extension of preferential programs to the classical secondary market is rather unnecessary,” he believes.

Olga Kuznetsova explains the mechanics of government support programs in the primary market, which were created to support the most multiplicative industry — construction. According to statistics, one workplace in a construction site provides 30 positions in related industries, which is why the state supports demand here.

— Of course, the secondary market has always been a fairly powerful driver for real estate under construction, — she added. — People sold their homes and moved to new homes in dynamically developing areas. Today, due to the high mortgage rate for the sale of apartments from individuals, the secondary housing market is stagnating. Naturally, there is activity, but its dynamics have decreased.

— It is hardly worth introducing such tools on the secondary market, — Sergey Sofronov is also sure. — The price gap is a completely normal picture, since the old stock and typical panel buildings occupy a huge share in the structure of the secondary market. If we evaluate the secondary market by the segment of what has been commissioned over the past 10 years, then the price difference may well be in favor of the secondary. There is no sense in such incentives for purchases of old housing as the issuance of cheap loans.

But Rustam Azizov believes that in order to stimulate demand, it makes sense to consider the possibility of extending mortgage programs with state support to the secondary market.

— This can, first of all, expand the possibilities of buyers for whom the sale of an old apartment is the best way to find funds for an initial payment, — he explained. — Now the situation in the secondary market is not easy, because the high level of rates forces either to withdraw the apartment from sale altogether, or to offer a potential buyer a solid discount — up to 30% of the market value of the apartment.

Ekaterina Nemchenko believes that the effect of preferential programs is equally important for new buildings and the secondary market. Apartments in new buildings commissioned deserve special attention. Large remnants of apartments that were not sold during construction can be difficult for developers and require attention and special programs.

— The decision to expand preferential mortgages to the secondary market is relevant only for cities and regions where construction is not underway at all and citizens do not have the opportunity to purchase new housing, — Jan Feldman suggested the option. — But still, such state support measures are not possible for all buyers, but only for certain categories that need to be improved as a matter of priority. That is, it should be more about targeted social support.

A mass distribution of preferential mortgages at low rates in the secondary market, according to him, is hardly possible. This, firstly, would require huge budget expenditures, and, secondly, would cause prices to rise again – but now on the “secondary market”.

The main thing is the key rate

The cancellation of all preferential programs does not seem to be planned yet — at least, the president promised to extend the family mortgage until 2030. Therefore, the question of whether the market can exist without government support programs is rather hypothetical.

— He will be able to exist, the question is how well he will feel, — says Sergey Terentyev. — In case of cancellation of all preferential mortgage programs from July 1, the drawdown in demand can be very significant. Firstly, it will be too abrupt a transition to market conditions, and secondly, the prospects for reducing the key rate from 16% per annum are still vague. In such circumstances, many potential buyers will postpone entering into a deal in anticipation of a reduction in rates. The transition to market mortgage rates will force the monthly loan payment to increase significantly, which will make debt servicing unaffordable for most potential borrowers. This will prove to be a big problem for the market. With the abrupt cancellation of all preferential mortgage programs, the primary market is facing very difficult times. The drop in sales will be total, at times from current values, and this period may take a long time. This, in turn, will lead to unpleasant consequences for developers, who, under the terms of project financing, are required to show certain sales volumes and fill escrow accounts.

At the same time, Rustam Azizov is confident that the complete rejection of preferential mortgage programs is, of course, the target model of the market.

— The state really cannot forever replace market mechanisms, however, in order to simultaneously abandon state support, it is necessary to maintain sales volumes in the primary residential real estate market using mortgages at the level of 2020-2023 — about 2 million apartments per year, — he explained. — This can be done with the help of preferential subsidization of mortgages by developers with the involvement of bridge loans. Already today, federal developers are able to subsidize up to 8% of market rates, but in each case the final figures depend on the occupancy of escrow accounts.

Maxim Turta also recalled that at the same time it is impossible to withstand bank covenants without a significant revision of project financing from lending banks.

— After the changes in the conditions under the program “State Support 2020”, most of the apartments under construction in St. Petersburg and a significant part of the facilities in the Leningrad region no longer fit the new lending limits, – said Jan Feldman. — Therefore, the cancellation of this program will not greatly affect the market. But changes in the terms of the family mortgage program may reduce the share of mortgage transactions. Now developers are promoting various tools to support the buyer — various types of installments, cashback, tranche mortgages, subsidized products, trade-in, etc. But the main demand is still provided precisely by state-subsidized mortgage programs.

Sergey Sofronov believes that the market can exist without mortgage subsidies, provided that the key rate drops to 5-7% per annum. And this is not only an impact on mortgages, but also on project financing, which in this case has a chance to get away from double-digit rates. In other words, the cost of servicing construction loans will decrease by about half, he added.

The topic of the key rate, which will be below 8%, was also supported by Tatyana Khalilova: thus, market rates will become comfortable for buyers of all categories. While the rate is at the current level, subsidies are necessary to support buyers with children and other targeted groups, for example, young professionals.

Something new

Developers do not exclude the emergence of new state support programs, although they still dream of returning to the old parameters of existing ones.

— We would like to see the return of the limit on state programs — up to 12 million in St. Petersburg, the Leningrad region, Moscow, – says Maxim Turta. — We would prefer the prolongation of the family mortgage in the form in which it exists now. This would allow us to look into the future with confidence, continue the development of the industry and delight customers with new residential projects.

Sergey Terentyev notes that he would like to see new preferential mortgage programs, but at the moment their appearance is not expected.

— We are waiting for the state to introduce new mortgage programs for new categories of citizens, it is already clear that preferential mortgages after July 1 are likely to take on a more targeted character and will be issued in “small cuts”, — comments Jan Feldman. — There are also hopes that closer to 2025, the key rate will finally go down, and then mortgage market conditions will begin to become more attractive to buyers.

— We expect the emergence of more targeted family mortgage programs and programs for narrower categories of buyers, — agrees Tatyana Khalilova. — Also, to make our projects more accessible, we are developing our own programs with banks, in particular, installment payment programs or tranches. This helps us to reduce the rate for the construction period.

Olga Kuznetsova believes that it is still difficult to talk about specific mechanisms to support demand after the completion of state support.

“If the government continues to provide assistance in a more targeted manner, then this support may be more significant, for example, granting a loan at a rate of 4-6% for certain groups of citizens,” she explains. — We always advocate special programs for teachers, doctors and specialists of other important professions. An additional possible mechanism could be the collaboration of developers with banks where escrow accounts are located, which allows you to negotiate special mortgage conditions, as well as a corporate mortgage program for employees from the employer.

Ekaterina Nemchenko noted that it does not matter what the programs will be called, the main thing is the conditions that mortgage programs provide and the opportunities to use them.

“With a high key rate, a mortgage without subsidies has a prohibitive cost and low demand,” she added. — A reasonable approach should be developed and mortgage programs for the general population should appear, allowing to improve housing conditions and buy modern apartments in new comfortable residential complexes.

Sergey Sofronov wants to see a preferential key rate first of all.

— Seriously, the regulation of the market by preferential programs is still seen as a temporary measure, — he noted. — To a certain extent, they can be developed and implemented for people employed in budgetary areas, whose incomes are determined by the corresponding expenditure items of local budgets.

Among the categories to which preferential programs should be extended, Rustam Azizov named young professionals to encourage young people to start a family and have children at an earlier age. One of the options may be a “Youth mortgage”, which can be extended to citizens under 30 years of age.

Photo: iStockphoto.com / aapsky

Источник: www.fontanka.ru