In July, the level of issuing mortgage loans was at a record high
The scale of the issuance of mortgage loans returned to pre-crisis levels even considering the uncertainty due to the epidemiological situation. In July of this year, the percentage of approved loans hit an all-time high. According to information from Dom.RF and Frank RG, over the past month, 140,000 loans were approved for a total of 340 billion rubles. Compared to the same period in 2019, this is 40% more in terms of quantity and 53% more in monetary terms. The maximum indicators were also noted in December 2018, when 157,236 loans were approved for the amount of 340.9 billion, and in December 2019, when 145,188 loans were issued for 345.1 billion rubles.
VTB representatives noted that the level of mortgages issued has been increasing in recent months. For example, in May, it approved loans for 62 billion rubles, in June — for 76.2 billion rubles, in July — for 78 billion rubles.
In July, Dom.RF approved about 3,700 loans worth almost 10 billion rubles, which is 70% more than the results of July 2019.
This surge in lending can be attributed to several factors. In April, a program of concessional mortgage lending at 6.5% was launched. In addition, in May, the government began to introduce relief in connection with quarantine. The deferred demand also played a role to some extent.
Another important factor was the reduction of interest rates on loans by many banks. The Central Bank cut the refinancing rate in July to 4.25%, followed by other banks began to cut rates.
It should be noted that the largest banks in terms of the size of the mortgage portfolio don’t deny the likelihood that rates will continue to be reduced.
For example, Tatsiana Ushkova, Chairman of the board of Absolutbank, said that the fate of mortgage interest rates would entirely depend on the actions of the regulator. Artem Ivanov, Head of the mortgage lending department at Alfa-Bank, said that the dynamics of interest rates on loans depends entirely on the behavior of the market and its demand.
Despite the sharp leap in lending, experts are confident that there will be no overheating. Citizens’ salaries are not growing, and the value of real estate is practically not decreasing. For example, the average cost increased by 15.3% per square meter in new buildings in New Moscow, according to statistics from the Bon Ton company. In regions such as Novosibirsk, Yekaterinburg, Tyumen and others, the price per square meter has grown by 5-14%.
The cost of housing in Russia depends on many factors. For example, cost price, ruble devaluation, prices for fuel and building materials. The main risk for mortgage lending is a drop in the income level of citizens due to the crisis and an increase in the unemployment rate. For the same reason, lending growth will soon slow down.
Experts note that the ongoing economic slowdown will most likely be long. Therefore, when taking a loan, you should sensibly calculate your own capabilities and at the same time have a rainy day fund so as not to expose yourself to risks.