Page 98 - RusRPTOct20

All in all, the programme was able to support the developers ruble sales in 1H20 (almost flat y/y), partially offsetting pandemic-related pressure on the market. As of July 2020, the blended mortgage rate went to a record low 7.28%, while 7m20 origination is up 20% to RUB1.8bn.
The existing programme is in place until 1 November and our focus is on its sustainability and consumer budgets toward YE20. Prolongation into 2021 on comparable conditions would become sizeable tailwind for developers in the short term.
The issuance of mortgages in Russia jumped by 38% year on year in absolute terms to 0.158mn loans, and by 59% y/y in monetary terms ​to RUB375bn ($5bn) in August 2020, VTB Capital (VTBC) wrote on September 14 citing the preliminary data compiled by Dom.RF state agency and Knight Frank.Asreportedby​bneIntelliNews,​ the​discountedmortgagesupport programme​ was a major support amid the coronavirus (COVID-19) crisis for the largest real estate developers and biggest banks. Moreover, the programme could be extended into 2021​. For 8M20 overall, 0.895mn mortgages were issued (+14% y/y) for a total of RUB2.2 trillion (+26% y/y). "The key driver of this record high mortgage origination was the subsidised mortgage programme (at 6.5%), with 90% of August mortgages on the primary market being issued through it," VTBC commented. VTBC reminds that the programme is in place until November 1, with a total of RUB740bn, while it could be prolonged until the end of 2021, subject to the efficiency of the existing programme and the availability of funds, according to Minister of Construction Vladimir Yakushev. "Since its introduction on 17 April, the subsidised mortgage programme has had a strong positive effect on residential sales during the pandemic-related economic turbulence," VTBC notes. In the sales of publicly listed developers, the share of mortgage sales climbed on average 10pp, from 50% in 2019 to 60% in 1H20. PIK reported the greatest contribution of credit sales, at 76%, followed by LSR with 59% and Etalon with 40% (all as of 1H20). "Our key focus remains on whether the programme is to be extended, as that could become a notable tailwind for developers in the short term, and how sustainable it is, as well as on consumer budgets," VTBC analysts write.
Real estate reports a record mortgage origination of RUB 375bn in August with the subsidised programme covers 90% and is the key driver for developers’ sales​. Dom.RF and Knight Frank have released preliminary estimates of the August mortgage data: 148,000 mortgages were issued (+38% YoY), while total origination stood at RUB 375bn (+59% YoY). For 8mo20, the figures are as follows: 895,000 mortgages (+14% YoY) and RUB 2.2tn origination (+26% YoY). The key driver of this record high mortgage origination was the subsidised mortgage programme (at 6.5%), with 90% of August mortgages on the primary market being issued through it. The programme is in place until 1 November, with a total for origination of RUB
98 ​RUSSIA Country Report​ October 2020 ​ ​www.intellinews.com