Photo: Konstantin Kokoshkin/Global Look Press
A strange thing is happening in the Russian real estate purchase lending market. Banks independently change the terms of government-subsidized (“preferential”) mortgages, clarify relations with developers and … cancel previously approved loans. Obviously, everyone is waiting for something, and it seems to be catastrophic and global. And the movements being made are nothing more than covering the rear and minimizing risks.
It all started with the fact that the largest players in the mortgage market: Sberbank and VTB — synchronously introduced commissions from developers whose apartments will be bought on a preferential mortgage. The levies are, in fact, prohibitive, there has never been anything like this before.
“The reason for the introduction of commissions was the low profitability of preferential loans for banks — on the verge of profitability. In such a situation, a source of increasing the profitability of banks was found — the introduction of commissions for developers. They are asked to pay a fee for the issuance of each loan under the state program. The amount of commissions varies from 8% to 13%, on average it is 10% of the loan amount at a time,” says Sergey Gordeyko, chief expert of Rusypoteka.
Profitability is, of course, good, but this fee is most similar to the creation by banks of a kind of “barrier barrier” in case of unforeseen circumstances in the real estate market. And the rest of the facts fit into this concept.
For third—party “off the street” clients, the initial payment is now at least 50% of the value of the property. It seems that according to the new rules for preferential mortgages, it was raised only to 30%, but the banks considered that this was not enough. And anyone who buys new buildings will not work now — only from “partners”.
All of this concerned preferential mortgages in any of its manifestations, there are several existing programs of this type. But the most interesting thing is that the same movements began in the market of “ordinary” mortgages.
“The other day, the bank called and said that my approval for a mortgage loan had been withdrawn. Why? Because some “essential conditions” have changed there — that’s how it was explained to me. What kind of conditions were not specified. We have not made any clarity about what documents will be needed in order for the loan to be approved again. They’ll get in touch with me. As soon as possible, so immediately. I’m kind of off the street, I work in a large structure, we have a close relationship with the bank. The initial payment is not at a minimum, and I have my own apartment — I intend to improve living conditions. I earn quite well, in general, I am almost an ideal client. And I can’t understand the logic of the bank,” complains Victor, a young IT specialist.
In principle, it is clear what “essential conditions” have changed. More precisely, it is declared.
“On December 15, 2023, the Bank of Russia decided to raise the key rate by 1.0 percentage points — from 15% to 16%. In this regard, from January 10, 2024, Sberbank increases rates by 1.1 percentage points for basic mortgage lending programs. At the same time, the rates for programs with state support do not change,” Sberbank said in a statement.
Everyone else followed the market leader. But that’s not all. Judging by indirect information, banks have begun to wind down programs at more favorable rates for “their own” (employees of client organizations), as well as to revise the amount of initial contributions. Naturally, in the direction of increase.
The standard validity period of the “approval” for a mortgage loan is 90 calendar days from the date of this decision. And, according to the current legislation, you can cancel this approval at any time. Even if the loan agreement has already been signed, the money may not be given to you. Everything is legal!
“The lender has the right to refuse to provide the borrower with the loan provided for in the loan agreement in whole or in part if there are circumstances obviously indicating that the amount provided to the borrower will not be refunded on time,” says paragraph 1 of Article 821 of the Civil Code of the Russian Federation.
So in the case of a young man, everything is in accordance with the legal framework. Another thing is that until recently, refusals actually occurred for one reason — at the stage of checking real estate, all sorts of “shoals” surfaced that bankers were not satisfied with. That is, there were completely objective problems related to documents for apartments (houses). Alas, there are more than enough real estate objects with “crooked” securities in the country.
This is clearly something else. But what? The first stage of “tightening” was observed in the autumn, but then potential mortgagees were simply sent to review the terms of lending. In accordance with the increased refinancing rate.
“Banks have begun to refuse to issue mortgages to Russians under previously approved conditions. In particular, about 30% of citizens who received approval in August-September were unable to take out a loan on approved terms,” Tatyana Reshetnikova, deputy head of the mortgage department of the federal company Etagi, said at the end of October last year.
Now people are just being turned away — as if for better times. Which, apparently, will not come soon…
“Our bank has never dealt with mortgages and does not deal with them, but I am aware of the problem from my colleagues. It’s very simple: a “Big Boom” is expected in the real estate market — as in that famous movie. And with the same disastrous consequences. That is, the collapse in prices. To what level everything will fall (if not to put it less decently …) no one can say, but at times for sure. The banking system of the Russian Federation already has more than 16 trillion rubles of mortgage loans, which, in fact, will remain unsecured. And no one is going to increase this unbearable burden. That is why there are “raids” on developers, and cancellations of mortgage approvals, and everything else,” says a top manager of a reputable credit institution.
Everything, in general, is completely logical. Banks minimize risks, although, of course, it would be worth doing this earlier — “it’s too late to drink borjomi.” With the constantly falling solvency of the population of the Russian Federation, these measures should have been introduced several years ago.
Moreover, at the moment it is quite obvious that the next increase in the refinancing rate, which happened on December 15, 2023, has nothing to do with it. This is so, rather an excuse, a disguise. The financiers clearly received some kind of “insider”, that is, reliable information about the real state of affairs in the real estate market.
That is why developers began to be sharply “pressed”, and preferential mortgages were de facto canceled overnight. As for the usual “market” loans for the purchase of real estate, the rates there have long been prohibitive — at the level of 20% per annum. Initial contributions are at least 30%, that is, the minimum for potential customers. But now they’ve got rid of them too. Just in case.
What was the impetus? Obviously, this is not the last increase in the Central Bank rate in 2023, because a month has passed since then, and in the world of finance it is not accepted to think for so long, it is fraught. Apparently, the bankers not only received some interesting information, but also quickly rethought the consequences of the communal disaster that occurred in December and January.
In principle, even this is quite enough, without the “inside”. After all, she clearly showed that all those idle millions of apartments simply have not to be put into operation. Since if these new buildings start consuming light, heat, gas and water, then all the networks to which they are connected will instantly collapse.
That is, it is not a valuable real estate, not an asset, but an illiquid. Just money and building materials buried in the ground. Such an “asset” will be worth something only if huge investments are made in infrastructure. And the developers, of course, will not go for this. They have money, but they are used to making super profits out of the blue.
This applies to the “primary” and all preferential mortgage programs. And the “secondary” was simply closed to the pile, for the above reasons. Dangerous. Soon, all real estate prices will drop, so it’s better to distance yourself from this market. With the above-mentioned mortgage portfolio of 16 trillion rubles, it will not work out very well, but at least this way. The thunder has not yet struck, but they are already beginning to be baptized. It’s a little late, though.
English 
Russian 
German 
Polish