Photo: Belkin Alexey/news.ru/Global Look Press
It’s already boring to comment on the topic of mass mortgages with state support — so much has been written about it. It would seem that the experience of such a program in 2020-2024 has clearly and vividly shown how it all ends. And no one should have any doubts anymore that its only beneficiaries are developers and banks, and it brings nothing but negativity to everyone else.
There is also an increase in prices, which makes housing even less affordable for citizens, even for those who use preferential loans: the price increase over the period of the preferential mortgage has more than offset the benefits of government support. There are also monstrous amounts of federal budget expenditures on compensating banks. There is also the need to compensate for the high volumes of preferential mortgage loans by suppressing credit for all other industries through a much stricter monetary policy (PREP), otherwise it will accelerate inflation, which we are currently witnessing and to which government-backed mortgages have made a significant contribution.
The negative results of the experiment with a massive preferential mortgage were so obvious that by the summer of last year, our officials, including the most notorious lobbyists of the construction complex, still had to publicly admit that this program was a mistake.
Everyone agreed that preferential mortgages make housing more affordable only if they are addressable, that is, their volumes should be small and support the target category of citizens in a targeted manner. Otherwise, the entire effect will go into price increases, which for the target category will negate the benefits of government support, and at the same time, government spending will grow at an exorbitant rate.
It would seem that now any proposals for the return of a massive preferential mortgage should be perceived as indecent. After all, after such a failed experiment, only completely unscrupulous industry lobbyists who are indifferent to both people and the state can offer such a thing again.
Nevertheless, less than a year has passed since the cancellation of the non—addressable preferential mortgage and the tightening of family conditions, as proposals for a significant expansion of the state mortgage support program are again being seriously expressed – so significant that it can now certainly be described as massive. Our authorities are ready to step on the same rake again, and at our expense.
So, in order. In the middle of last year, the main government mortgage support programs came to an end, and a political decision was made to make government support more targeted. Namely, it was decided not to extend the program of public preferential mortgages for new buildings, and to extend the family mortgage program, but at the same time to tighten the conditions so that the volume of loans was significantly reduced.
It was not possible to significantly reduce the volume of disbursements: the construction lobby did not allow it. Under their influence, the parameters of the new conditions were chosen so that mortgages with state support still remained quite widespread.
As we saw later from the statistics of the Central Bank, the monthly volumes of family mortgage disbursements after July 1 turned out to be comparable to the monthly volumes of disbursements in the period up to mid-2023 for all government-supported mortgage programs in force at that time. So do not be surprised that housing prices have not just not fallen, but continue to grow quite briskly, that is, the bubble in the residential real estate market is inflating even more.
It is worth noting that the configuration itself (and not the numerical parameters) of the family mortgage terms, which came into force on July 1, 2024, turned out to be significantly better than before.
Therefore, unlike all previous government-backed mortgage programs, the current family mortgage option actually contributes to solving the pressing problems facing our country (if, of course, we forget about its exorbitant cost for a moment).
Namely, the current configuration of family mortgage conditions is more stimulating from the point of view of demography and, moreover, contributes to a more even development of the regions and territories of our country. Let’s explain in more detail.
Currently, families with a disabled child and families with one child under 6 years old are eligible for a family mortgage at 6% throughout Russia (previously it was up to 18 years old). The latter means that such a family mortgage creates a financial incentive to have another child, even if there are already children in the family, but older than 6 years. (We are not discussing the question of how much material incentives influence the appropriate decisions of families here: we will leave it to professional demographers, who, by the way, are very skeptical in this regard.)
In addition, families with two minor children living in certain territories are eligible for a family mortgage — in small towns (with a population of up to 50,000 people) or in regions with low construction volumes or with individual development programs; there are 35 regions in the corresponding list. This means that this configuration of the family mortgage contributes to the development of territories that are currently lagging behind and from which people are leaving.
Thus, the development of the entire territory of our country becomes more uniform, and this is a very correct, long overdue measure!
If we do not want our country to consist of several anthill cities in the near future, standing in the middle of vast deserted spaces, then this is the way to go: to create incentives for people to live outside megacities and especially in the outback.
It is clear that mortgage benefits alone will not solve this problem. The development of peripheral territories should be carried out comprehensively. But more favorable mortgage conditions for housing in such territories may be one of the most important components in this package of measures.
Unfortunately, even in the current version of the family mortgage terms, things are not going smoothly with stimulating the development of regions, since it contains a measure that has been preserved from previous programs and has exactly the opposite effect.
This refers to the difference in the maximum amounts of concessional loans, which encourages people to move to the most populated megacities and urban agglomerations.
The maximum amount of a preferential loan in Moscow, the Moscow region, St. Petersburg and the Leningrad Region is 12 million rubles, while in other regions it is 6 million.
Thus, mortgages in these regions become more profitable than in the rest of the country. And at the same time, the lion’s share of state support funds from the federal budget still goes to these most prosperous regions, which is not only counterproductive from the point of view of the country’s regional development, but also extremely unfair!
Nevertheless, despite this drawback, the current version of the preferential mortgage terms is significantly better than what it was before, and it would only be enough to recalibrate the parameters (towards stricter participation criteria and a greater emphasis on having many children) for the program to really work for the benefit of the country, and for reasonable money from the federal budget.
But no! Our authorities are ready to do exactly the opposite and jump back on the same rake that they have already trampled on in the four years from mid-2020 to mid-2024. The possibility of extending the family mortgage program to families with one child under the age of 18 is being considered. According to RBC, the issue was discussed at a meeting with Deputy Prime Minister Alexander Novak on February 28.
If this is done, the positive aspects of the program that we described above will immediately disappear. She will no longer encourage families to have more than one child. And the special conditions for territories requiring development support will also be nullified.
Such a change in the terms of the family mortgage will be counterproductive for both demography and regional development.
Plus, such a family mortgage will become truly widespread, with all the consequences for the federal budget and for real estate prices. Thus, realtors interviewed by the BusinessFM portal estimate that the demand for family mortgages will grow by at least 30%.
In fact, a 30% increase in demand is too conservative an estimate. It is clear that it is advantageous for representatives of the construction complex to underestimate the potential growth in demand so that officials do not consider it unacceptably high and do not change their minds about significantly expanding the program.
The assessment that follows from the data from Grigory Zhirnov looks more reasonable. from the Higher School of Economics, which the portal provides banki.ru . According to the calculations of this expert, the expansion of the program to families with one minor child will allow more than 15 million families to apply for it, while about 7 million families currently meet the criteria.
In other words, the number of potential recipients of a family mortgage will more than double, and it is quite natural to assume that the demand for preferential loans will grow by about the same amount.
Let’s see what the volume of disbursements may be with the proposed expansion of the program, and compare it with the indicators of previous periods. After July 1, the volume of family mortgage payments is about 200-250 billion rubles per month. If demand doubles, the volume of disbursements will also increase by about half — to 400-500 billion rubles (there are no more limits: the greater the demand, the more disbursements).
For comparison, in total, for all preferential programs in the period up to August 2023, the volume of disbursements was about 250-300 billion rubles per month. Then, starting in August 2023, the volume of preferential mortgages increased dramatically: in the 10 months to June 2024, monthly government-backed mortgages averaged about 500 billion rubles in total for all programs.
There were two main reasons for this jump. First, in the fall of 2023, people tried to take out loans before the announced tightening of conditions in January (the initial payment increased), and then sought to “jump into the last car” before the expected completion of programs from July 2024.
Secondly, after the start of the interest rate increase cycle in August 2023, the “investment optimization” started working.
With high interest rates, taking out a loan at 6-8% and investing money in real estate, while keeping your own funds on deposits, has become a good investment idea, which many wealthy citizens are happy to use at our expense.
Two important conclusions follow from these statistics. Firstly, at present (that is, after the change in conditions from July 2024), the volume of government-backed mortgages is quite comparable to the “natural” (that is, not distorted by the specific factors of the “last wagon” and “investment optimization”) level of such mortgages in that period (until August 2024), when it was already characterized as massive and significantly accelerated housing prices and federal budget expenditures.
Secondly, if the idea of extending family mortgages to families with one child under the age of 18 is implemented, it can be reasonably predicted that the volume of disbursements will be comparable to the huge volume of disbursements that we observed in the period from August 2023 to June 2024, when preferential mortgages became not just “massive”. and “massively popular.”
As it is now clear, the “preferential mortgage orgy” from August 2023 to June 2024 became one of the most important reasons for the acceleration of inflation that we saw in the last months of last year. If the criteria for a family mortgage are expanded, we will get another wave of accelerated inflation in 2-3 quarters, and then we can forget about lowering the key rate for a long time.
In conclusion, we note a circumstance that makes the potential expansion of the family mortgage counterproductive from another point of view.
Currently, the geopolitical situation is such that in any economic planning, it is necessary to consider, among others, the scenario of the end of the SVR in the near future. In any case, on the horizon of the family mortgage program (until 2030), the completion of its should certainly be considered as a baseline scenario.
This means that a massive program of rebuilding new regions will begin, and this will have to be done as quickly as possible. This will be a major political task. Our new regions should become a real “blooming garden”.
Therefore, all the capacities of the construction complex will need to be directed, as far as possible, to solving this problem. In particular, the entire building materials industry will have to work mainly to rebuild new regions.
Therefore, for the first couple of years after the completion of the SVR, the volume of construction in territories outside the SVR zone should be greatly reduced so as not to divert resources from the more urgent and important task of restoring new regions. And the expansion of the family mortgage program in territories outside the CBR zone will interfere with this.
So, the expansion of the family mortgage program is just a plundering of state resources in broad daylight, and the task of the opposition is to do everything possible to stop it.
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