From the second half of the year, the housing lending market will begin to cool down, the bank explained
In the second quarter of 2024, Russians will issue mortgages for almost 2 trillion rubles, which is almost twice as much as in the first quarter (1.05 trillion rubles). This forecast is contained in the VTB message. According to the calculations of the bank’s experts, the total sales volume for the first half of the year may amount to about 60% of all disbursements in 2024.
VTB explains the expected surge in mortgage demand in the second quarter with the completion of a preferential mortgage for new buildings at 8%, which will encourage potential borrowers to have time to apply for a loan before its end on July 1. Against this background, the maximum activity of borrowers will be recorded in June, and the final result of the first half of the year (about 3 trillion rubles) will be comparable to the first half of last year, analysts predict the bank.
At the same time, starting from the second half of the year, the housing lending market will begin to cool down. “In the second half of the year, the mortgage segment will be rebuilt, sales volumes in general for the year will be lower than last year. Further market growth largely depends on lowering base rates and restarting refinancing programs,” warned Georgy Gorshkov, Deputy President and Chairman of the VTB Management Board.
Earlier, the NKR agency predicted a record for mortgages before the completion of benefits. According to their calculations, in June, the demand for mortgages against the background of the cancellation of the preferential program, under which loans are issued at 8% per annum, may repeat the record of September 2023, when loans amounted to 955 billion rubles. As a result of the tightening of conditions and the end of the issuance of mortgages with state support at 8% by the end of 2024, the volume of mortgage loans may decrease by 15-25% compared to the record of 2023 (7.8 trillion rubles), to 5.8–6.4 trillion rubles, the NKR predicts.
According to the Central Bank, in March, Russian banks issued mortgages for 447 billion rubles, which is one third (34%) more than in February (333 billion rubles). The growth was mainly due to preferential programs — the demand for them increased by 50%. Nevertheless, the total mortgage issuance in March 2024 was 21.4% lower than in March last year.
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