Photo: Konstantin Kokoshkin/Global Look Press, archive
Everything is fine in the real estate market, with mortgages too, there is no “bubble”, on the contrary, growth and development. Such statements have recently appeared with frightening frequency, which makes you think hard: everything is not just like that. Just at the beginning of May, before the ruble began to fall, we were all strongly recommended to convert our savings into Russian currency. Analogies are now visible. So, it’s worth waiting for something bad.
“There are no signs of a bubble gathering in the mortgage market of the Russian Federation yet, the situation is developing in conditions of high natural demand for housing. In general, the market is balanced, flexible, competitive, and responds well to price dynamics.
We see an increase in the pace of housing construction. This year, in the first five months, we see a 20% increase in the launch of new projects. The prices gave the result — developers began to build more. People began to buy more housing. Most of the housing is bought for living. This is a healthy situation on the horizon for the next 10 years, since there was a birth rate boom in the early 2000s. These people come to an age when they are ready to take out a mortgage,” the chairman of the board of the state bank DOM broadcasts. Russian Federation Artem Fedorko.
It is quite clear what “prices have given a result” is — the value of real estate has gone down. This was not discussed at this level until recently, but the ostrich still took its head out of the sand and admitted that the northern furry beast was on the way.
As for the “birth rate boom” at the beginning of the 21st century, it’s worth just looking at the charts, they are available. And to understand that “Stirlitz was flogging nonsense.” However, there is enough of that in this assessment of the situation without a boom.
Rosstat, of course, recently drew another 146% of GDP growth, but even this office had to admit that housing construction was failing. Minus only 2.8%. However, the Housing and communal services have a more realistic figure.
“The total area of residential premises in residential buildings built by individual developers amounted to 25.5 million square meters, or 59.1% of the total volume of housing commissioned in January-May 2023,” the report says.
It looks more or less like the truth here. But in mass construction, the picture seems to be similar. And here’s why: 150-200 million square meters of new high-rise buildings are idle all over Russia, there are simply no buyers for them. That is, several million apartments. And additional ones are simply not needed.
The problem is not that they are just standing. And the fact is that uninhabited houses tend to collapse quickly. Water should flow through the pipes, cold and hot, heating should function, as well as ventilation. Again, emergency crews are required to repair leaky roofs and fix other problems. Otherwise, the pipes will quickly rust, the taps will sour, mold and mildew will crawl along the walls. Actually, any real estate owner knows this. And in a couple of years, all these dead cities and neighborhoods will have to be stupidly demolished. Which also costs money, and colossal.
According to the May report of the Central Bank, the debt of Russian citizens on mortgages is 15.085 trillion rubles, but for some reason the share of non-payments in this sector of the credit market is scanty. Although the trend is clearly extremely negative.
“The volume of non-payments in mortgage lending is starting to increase, these were the expected consequences of the rapid growth of mortgages in 2020-2021. The solvency of the population is declining, refinancing programs have practically left the market, but we associate the current surge in non-payments with credit vacation programs. The current increase fixes the impossibility of restoring payments to the schedule after their completion for individual borrowers, that is, the grace period has passed, debtors cannot take advantage of the holidays again.
Since the beginning of the year, the volume of overdue mortgages has increased by 1.015 billion rubles, or +2%, to 59.8 billion rubles. Now we see that the share of overdue mortgage debt will no longer be so low, it will grow. Mortgages are issued less, plus borrowers who took out loans in previous periods began to experience difficulties. The real estate market is weak, and the number of potential home buyers has decreased. This makes it difficult to quickly sell mortgaged housing and, as a result, repay a problematic mortgage. I believe that by December, the volume of new mortgage debts may grow to 5 billion rubles,” said Denis Aksenov, General Director of the Debt Consultant collection agency.
The picture is bleak, but here you need to understand that it is based on data that is not classified. And there are very few of them nowadays. The problem of mortgage defaults is not advertised, as it is fraught. Most of the delay is simply not taken into account. It seems that she is not there, everything is fine, and constructive negotiations are underway with the debtor.
Even malicious defaulters have not yet been evicted, banks have been given appropriate informal recommendations. This is especially true for families with children, financiers are invited to negotiate with them without fail. Because the situation in the country is extremely alarming, and anything can serve as an impetus for the start of spontaneous deratization.
From an economic point of view, everything is sad too. Yes, mortgaged housing cannot be sold now, unless for a penny. And to start evicting defaulters en masse, putting their apartments up for sale — the real estate market will collapse altogether. At times, if not dozens of times. In terms of the cost of square meters. There is already more than enough living space for sale, the mentioned neighborhoods are empty.
The above-mentioned 59.8 billion rubles of non—payments are only 0.4% of the total amount of mortgage debt. By contrast, this is more than 10% for consumer loans, and at least 12% for credit cards. In general, there are already quite public estimates that citizens do not repay 20% of loans.
And we are told that the mortgage is only 0.4%. Whereas housing is bought on loan by those who do not have the opportunity to save up for an apartment. Yes, they try to pay on time, mortgagees are indeed the most reliable category of borrowers. But the general economic situation in the country is the same for everyone. Therefore, if the patient is ill, he cannot have a temperature throughout the body, for example, 38.5, and, let’s say, in the anus — 36.6. Will we believe such a doctor?
It is curious that the other day the Supreme Court generally forbade taking away housing from mortgage lenders who do not pay on loans. That is, official recommendations for banks have been added to the informal ones. The delay can reach 5% of the debt amount, and the term is no more than three months. However, all these parameters can be adjusted…
And at the same time they assure us: everything is fine, beautiful Marchioness! There is no “bubble”, and prices will not collapse. What’s the point, what’s the catch, where they want to deceive us?
First of all, structures, both public and private, are interested in continuing to receive payments. The average rate on existing mortgage agreements is an exorbitant 8.4% per annum for the rest of the world. With a debt of 15 trillion rubles per year, the volume of annuity payments is more than 1.26 trillion rubles. A serious penny… If the people stop unfastening this money at once, the Russian financial system will simply burst.
And it will cause an “acute increase in social tension.” Namely, those in power fear him the most. That is why all sorts of optimistic statements are being made about the fact that everything in the country is fine. And in the real estate market, and with a mortgage, it’s absolutely wonderful.
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