Mortgage rates: why will they fall? BN turned to specialists with a request to tell how they see the mortgage market in six months. What will happen to interest rates, will the share of products subsidized by developers decrease, will demand for
Nikolai Alekseenko, General Director of the Rating Agency for the Construction Complex: - The country's mortgage market is gradually entering a growth trajectory: rates are falling, transaction volumes are increasing. Obviously, the gradual reduction of interest rates on loans is a positive development. However, one should not forget the other side of the coin: the population is getting used to this decline. This leads to the fact that part of the current demand for mortgages flows into the future, in which bank rates are expected to be at the level of 8-9%. It is logical that in order to maintain this demand, developers need to offer such rates here and now, especially since the percentage of subsidies is increasingly declining over time. In this case, subsidizing is more of a psychological tool than an economic one. So with a high degree of probability in the second half of the year, the share of loans subsidized by developers will increase. Meanwhile, all current trends say that by the end of the year the bank rate will drop to 10%. There are many reasons to believe in decline. First of all, this is the ongoing gradual easing of the Central Bank's monetary policy against the backdrop of relatively low inflation. It is also important to note the development of mortgage products in general, such as electronic mortgages and mortgage bonds. Do not forget about the specifics of the country's mortgage market: in fact, almost all trends are set by one or two major players, and in many respects the indicator that other banks will start from will depend on them. Nazar Arzhannikov, head of the market analytics group at DeltaCredit Mortgage Bank: - Until the end of the year, the mortgage rate will decrease. I predict that the weighted average rate at the end of the year may fall below 10%. Further movement depends on the cost of oil, which can accelerate inflation. And in the event of inflationary pressure, the Central Bank will become more cautious in reducing the key rate, and banks - in lowering mortgage rates. If our baseline forecast is implemented, the issuance of housing loans by all banks at the end of the year will amount to 1.8 trillion rubles. (approximately 1 million issues). At the end of the year, we ourselves plan to issue 56.3 billion rubles. loans throughout Russia. Specifically, for the second half of the year - about 34 billion rubles. Oleg Tikhomirov, Deputy Chairman of the North-Western Bank of the Savings Bank of the Russian Federation: - We expect a decrease in mortgage rates, but we also take into account the fact that this decrease may be recouped by real estate prices. We have several drivers which we focus on when making certain decisions on a business plan. And first of all, we evaluate our market share: if it grows, it means that we have taken the right position. But you need to understand: at the same time, we do not have the task of taking 100% of the mortgage market, if only because this implies an increase in delinquency and the number of defaults. There will always be clients for whom we are not prepared to take the risk. And with an average mortgage market share of 50%, Sberbank has a 45% share in a number of regions of the Northwestern Federal District, 68% in the Arkhangelsk Region, and 61% in Murmansk. And there is no point in increasing this share further. Meanwhile, our plans are drawn up for a year and are adjusted every six months, since we usually overfulfill them. And so far, the target figure for the end of the year has not been worked out. But in the first half of the year we issued mortgages for 56 billion rubles. Multiply this figure by at least two and add the traditionally more active demand in November-December. Wang Li, Director of the Marketing and Sales Department of CJSC Baltic Pearl: – In 2017, the mortgage rate went down, and we hope that this trend will continue. The return of mortgage borrowers to purchases in the early stages of construction remains in question. This is a matter of confidence in the builder. Market conditions have tightened this year, so the financial well-being of some companies is ambiguous. However, major players with a strong financial cushion are not expected to experience major difficulties. I believe that for such companies the percentage of transactions at an early stage of construction, including mortgages, will be quite high. In Baltic Pearl, today the share of mortgage transactions is 55%. Think, by the end of the year it will remain approximately at the same level. Finally, consider a mortgage with a subsidized rate by the developer. This is perceived by the buyer as a marketing ploy. And, as far as I know, such offers themselves are not particularly popular, acting more like an additional advertising occasion. Therefore, I do not think that the number of such programs will somehow increase significantly in the second half of 2017. It is important for us that the mortgage programs for Baltic Pearl apartments are as transparent as possible, so we do not use this tool. Maria Batalova, acting Absolut Bank branch manager in St. Petersburg: - According to our estimates, by the end of 2017, mortgage rates will approach 9%. By the way, equalization of interest rates for primary and secondary is possible only if if the secondary market outstrips the primary market in demand to compensate for the previous gap. Such a scenario is unlikely, since demand in the primary real estate market is traditionally higher than in the secondary one. Accordingly, the reduction of interest rates in the primary real estate market will be faster. In their own plans for issuing for the second half of the year, there is a stable increase from month to month and an increase in the mortgage portfolio of the bank branch in 2017 by 20% compared to 2016. Vitaly Korobov, Development Director of the construction and investment holding Akvilon Invest: – In the third and fourth quarters of 2017, the share of mortgage programs subsidized by developers will continue to grow steadily. As for the acquisition of apartments in the early stages of construction, then the impeccable reputation of the developer will continue to play one of the key roles in the decision of the borrower. Dmitry Alekseev, Deputy Head of the Retail Business Directorate of Bank St. Petersburg: - The share of mortgages subsidized by developers in the second half of the year will remain at the current level or grow slightly. But this forecast does not apply to the actual number of such transactions, since some of the applications for subsidized mortgages are declarative. As for our own issuance, we expect a slight increase compared to the first half of the year. Within 15%. Let me remind you that over the past six months in the North-West, Bank Saint Petersburg issued a mortgage for 10.4 billion rubles. This is 4.7 thousand loans. Despite the presence of branches in other regions, almost all loans are issued in the North-West Federal District, which does not prevent the bank from constantly entering the federal top 10. Tatyana Khobotova, Head of the Mortgage Lending Department of the VTB 24 branch in St. Petersburg: - If the downward trend in annual inflation, and with it the key rate of the Central Bank of the Russian Federation, continues, it is possible that in the next year and a half, the leading players in the mortgage lending market, including including VTB 24, will reduce the minimum rates to the level of 9% per annum. Taking into account the continued growth in demand for mortgage loans, we expect mortgage issuance in St. Petersburg to grow by more than 10% by the end of the year. Vladimir Emelin, deputy head of KCO, St. Petersburg branch of Alfa-Bank: - The share of mortgage programs subsidized by the developer will grow. Subsidizing the mortgage rate is of interest to all parties: customers are provided with an attractive minimum rate; developers and banks increase the client base; companies become more recognizable and create a positive image. PS Recall that today the average mortgage rate according to the index of the Banki.ru website is 11.85% per annum. According to the results of May, the Central Bank estimates it at 11.32%. And none of the specialists involved gave a forecast about stopping its decline.
