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The government has no money for serious support mortgage

У правительства нет денег на серьезную поддержку ипотеки

Since the beginning of 2019 the major players of the Russian financial market, Sberbank and VTB, have already raised mortgage rates. First now offers a loan product from 10,8% (+1 PP), and the second, at an average rate of 10.1% (+0.6 PP). In the same way is going to do in the very near future and Gazprombank: the intention already announced, although the decision is still pending.

This situation cannot but worry people, causing rumors and talk about the next collapse of the Russian real estate market. “SP” asked the analysts what to expect in 2019, this segment of the economy.

— In fact, banks since August began cautiously to “play to improve”, when it became clear that in September the Central Bank will move to raise the key rate, — noted analyst GK FINAM Alexey Korenev — So the stakes, it turns out, there are already not the first day. Fortunately, the growth rate is still small reason to raise rates high yet is not seen.

“SP”: — However, in principle, to increase the base still there?

Yes. First, it is clear that the increase in the key rate of the CBR pulls rates on all credit products, including mortgage. Secondly, the rates go up because banks include in the mortgage products risks associated with currency fluctuations, and in General with foreign policy and macroeconomic risks, like sanctions. Thirdly, his word said and a noticeable tightening of the law on joint construction number 214-FZ, which significantly restricts not only the rights of the developer, but also their earnings. Moreover, in the transition to the escrow accounts of real estate at the stage of excavation, under construction, will go up exactly, and for the year quite significantly.

“SP”: — please Explain again why?

Because of the escrow account, in principle, suggest the presence of an intermediary who also take some Commission for their services.

“SP”: — But the intermediary in this case is the Bank itself!

— Well, he’s not going to work for free. He needs to attract resources. To involve experts who will sit and evaluate deals, quality construction and possible risks. Besides, most of the developers will have to take loans from banks. Of course, they also cost money. Of course, the size of the mortgage will also increase. And the vast majority of apartments in the primary market are bought in mortgage by the citizens who do not have the opportunity to buy already-built housing.

“SP”: — What will happen to customer demand in such hands?

— Some part of it will shift into the ready segments of the primary property and for “secondary”, which, incidentally, is also a bit more expensive. Of course, to a lesser extent, but nonetheless. I think that if at the end of the year flat on the stage of excavation will increase by 8-10% in the other two segments will be plus 4-5%. With regard to the activity of buyers, that is not to the expected stagnation, but absolutely accurate slowdown in mortgage lending and the pace of development. This is because of two reasons. The first — a large number of developers, anticipating problems in the transition from equity to the financing of the project, tried to build housing with large stock, and the surplus on the market is definitely affected. The second reason — the exhaustion of consumer demand.

“SP”: — But the government is full of hopes and expects the opposite of demand growth in the same mortgage.

— I don’t know where the government is the dream of growth to 6 trillion rubles on the mortgage annually, and the output of the line 20 trillion. It is impossible, if only simply because to achieve this, a home mortgage should take every Russian family. And most families just can’t afford to get a mortgage even with a zero rate, not to mention the rate of 10%. They even the initial payment does not pull. The peak effective demand peaked in 2018, those who caught a moment when will become cheaper, he was caught. And in the coming year to buy apartments will be the only ones who missed, or those who do have this urgent need.

“SP”: — what about the program of preferential mortgages for families with kids? Rather, the updating of its parameters? For example, Deputy Prime Minister Tatiana Golikova at the Gaidar forum said that the period of preferential interest rates will be increased, if not will work the entire term of the loan. In addition, it also announced the provision of subsidies according to the “key rate of the Bank of Russia + 4 percentage points” and other innovations. Will not help?

— All Federal program, like preferential mortgages for families with children or care for certain categories of borrowers, whether military or married couples, a relatively small volume. It is, of course, have an impact on the mortgage segment, but not a global, and very local. The same situation with similar regional mortgage programs because of their significant limitations. So preferential programs is, of course, good, but, alas, the majority of them misses. So that the amount of the mortgage, and the pace of implementation of housing will fall.

“SP”: — How much can be assumed?

— It is difficult to say, it will be seen in the first quarter. But it will definitely be lower than last year. Because developers to reduce prices will not be, and so they are on the verge of profitability. It’s certainly not a disaster, a disaster was in 2015-2016, just the results will be worse than last year.

“SP”: — And the government any additional programs, such as subsidizing interest rates on loans already will not interfere? Will not pull the market?

— The government may be happy to help, because in fact, the share of mortgages in the Russian GDP is low, only 6%. For comparison, in the United States is nearly 80%, and in Europe, 20-40%, there is in many ways the engine of the economy, but under this and other power used, and the solvency of the other. But the Russian government has no money and resources for serious help. Already collect the last penny in taxes and fines.

“SP”: — Well, if the demand and supply in the mortgage is quite clear, is it possible for some signs to suggest whether the rise is still the key rate of the Central Bank of the Russian Federation in the first or second quarters of this year?

It will be seen in January. Because the key rate is tied to inflation risks. And if the current rate of inflation continues, in January inflation may reach the target of 1.3% and 1.5%. The last level, by the way, is critical and above this ceiling, the Central Bank’s inflation will not go. But for this already in February 2019, he will be forced to raise the key rate. This option is not so unattainable, because the beginning of January was very bad. Gasoline, for example, grew by 1.7% in the regions, which was not expected. If inflation in January will be a small percentage, in this case, most likely, the Central Bank will be very carefully and deliberately to make such a decision. Because the increase in the key rate, of course, relieves some of the inflationary risks. But it’s a lot of pressure on a business increases the cost of borrowed money for entrepreneurs, and the public. High interest rates do not affect the turnover, GDP and so on. In this case, the Central Bank is between two fires.

“SP”: — How much and how often it can raise?

— Again, if inflation in January will not come to 1.3%, the probability of interest rate hikes will be low, at least 50-50. But if inflation turns out to be in the range of 1.3−1.5%, then the probability of a rise in the key rate in February is very high. How much and how often it will lift at year-end — is difficult to predict, it will depend on future inflation. But I think that by the end of the year we are absolutely sure we will see 8%. But will we finish in 2019 with the key rate at 8.25% or 8.5%, will depend on the situation with oil, inflation and a whole bunch of parameters. At the same time, alas, it’s all unpredictable.

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