Page 93 - RusRPTOct23

quality in recent months.
The budget for 2023–2025 outlines allocations of 46.5bn rubles for bank subsidies on preferential mortgages and 72.9bn rubles for family mortgages in 2024. However, in the draft budget for 2024–2026, these figures have significantly increased to 230bn rubles and 223.8bn rubles, respectively, indicating a change in policy direction. This year's budget earmarked 150bn rubles for these programs, while the 2025 forecast has also risen sharply to 226.3bn rubles.
Several factors contribute to this significant growth. Firstly, the key interest rate has risen from 7.5–8% to 13%. Secondly, the unexpected extension of preferential mortgages for new buildings by Vladimir Putin, against recommendations from the Central Bank and the Ministry of Finance, led to an expansion of family mortgage conditions.
The continued growth in mortgage issuance, particularly preferential mortgages, also plays a role. Mortgage lending has expanded, with a 15% increase in the housing loan portfolio in the first seven months of the year, driven by record issuance of 461bn rubles in August. Predictions for total mortgage lending in 2023 range from 6.5 to 6.7 trillion rubles.
Efforts to cool mortgage lending include increasing the down payment from 15% to 20% and reducing bank subsidies by 0.5 percentage points. Experts believe the impact of these measures will be felt in the market next year. However, the Central Bank has noted a rapid deterioration in mortgage quality, with 71.7% of new mortgages in the second quarter going to borrowers spending over half their income on loan servicing. In the mortgage portfolio, such loans account for 60.8%.
Until the end of 2023, mortgage issuance can set several records at once against the backdrop of an increase in the key rate and tightening of regulation: monthly, quarterly and annual, they write in a new review of analysts from the NKR rating agency.
According to their estimates, at the end of the year, the figure could reach 6.5–6.7 trillion rubles, which is 35–40% more than in 2022 and 14–18% more than the record year of 2021.
Alfa-Bank also predicts the volume of loans in 2023 at the level of 6.7 trillion rubles. and record an increase in demand in the last weeks of August for standard programs, which began to increase rates, says a bank representative. The rest of the experts interviewed by Vedomosti do not expect loans even at the level of 6 trillion rubles, but at the same time they do not exclude the possibility of updating the annual record. In the first half of 2023, banks issued mortgage loans to citizens for 3.05 trillion rubles.
93 RUSSIA Country Report October 2023 www.intellinews.com