Page 132 - RusRPTApr23

January).
Banks also began to revise the conditions for “soft mortgages from the developer”: now they offer rates from 3%. However, this is still well below market indicators which indicates the persistence of the practice of overpricing housing.
In the future, we expect the situation to level out, taking into account forthcoming loan reserving, total cost which are significantly below the market.
Market mortgage issuance also increased (tentatively by ~40%, up to RUB210bn. in February from RUB152bn in January).
Growth rates of mortgage lending in Russia accelerated to 1.5% in February 2023 after a slowdown traditional for the beginning of the year (+0.6% in January), the Central Bank reported on March 22. Subsidised extension of mortgage loans started recovering last month following a slowdown in January - to 209bn rubles from RUB128bn (+64%). Market mortgage extension also rose (in February, preliminarily, by 40% - to RUB210bn from RUB152bn in January).
Demand for Russia’s beneficial mortgage program for IT employees has missed the expectations of the Digital Development Ministry due to the difficulty of getting the loan, business daily Kommersant reported on March 10 citing market participants, banks, and developers. The 5% mortgage program with the initial instalment of at least 15% was launched in May 2022 and became one of the measures to support the industry after the start of the operation in Ukraine to keep IT specialists in the country. According to DOM.RF, Russia’s banks gave out 5,000 loans for 44.79bn rubles as of the end of 2022. The ministry calculated the amount at 47.7bn rubles. When launching the program, the ministry expected 10,000 people to use the program in 2022. According to the authority, the program will cover 50,000 employees of IT companies for 240bn rubles in 2022–2024.
Russian banks extended more than 420bn rubles ($5.5bn) worth of mortgage loans in February, a 1.5-fold increase compared with January, according to VTB’s figures.
Last February sales were 12% higher amid roaring demand as rates were expected to grow, the press service of Russia’s second-biggest lender said in a statement.
"Traditionally the real estate market is characterized by low client activity, though this is the second consecutive year with the situation notably different from standard trends. Last year sales were driven by the upcoming growth of the key rate, whereas this year subsidized mortgage loans are the main driver. <...> We expect mortgage demand to be still high and more stable in
132 RUSSIA Country Report Russia April 2023 www.intellinews.com