One way or another, banks have already started raising mortgage lending rates. The developers do not rule out that the trend continues.
The increase in mortgage rates at VTB Bank is just the beginning of a trend, believes Ilya Kolunov, Deputy General Director for Business Affairs and Public Relations of the Garden Ring group of companies. According to him, this will be followed by an increase in mortgage rates from other banks.
Previously, VTB increased rates for the purchase of housing in the primary and secondary market by 1 percentage point from May 29. Several other banks have done this before. In particular, RBC reported on Uralsib and Sovcombank with reference to the Unified Information System for Housing Construction.
The head of the mortgage lending department of the Granel Group of Companies, Tatyana Boeva, says that after VTB announced an increase in mortgage rates and on the horizon of the expected increase in the key rate by the Central Bank, there is reason to believe Other banks can follow this example. Normally, banks react instantly to changes in the Central Bank’s key rate, as this directly affects the cost of raising capital.
“We analyze Rosstat data and monitor inflation daily. Based on what we are seeing, we expect the key rate to increase between 1 and 2 points. An increase in the interest rate of 1 to 2 points will have a slight impact on the issuance of mortgage loans and, consequently, on sales. The fact is that a prohibitive percentage has been set for classic mortgages, so their share in the banks’ loan portfolio is too small. A faster market reaction can be expected after the government cancels state-supported mortgage programs, which account for up to 80-90%,” says Kolunov.
Evgeny Vechkov, CEO of the Zhiloy Kvartal business group, also considers the current rates for classic mortgages for primary and secondary housing to be prohibitive. They greatly influence real estate sales.
“Since, despite the fact that preferential programs are still in effect for new buildings, the primary and secondary real estate markets are strongly interconnected, depending on the region, 30 to 50% of apartment buyers in new buildings and of individual housing construction Use the money from the sale of an apartment as a down payment. Therefore, the current average rate of 17.5% per year for mortgages on secondary real estate affects consumer activity and slows down sales in both markets,” says the expert.
Of course, banks can move to a massive rate increase if the regulator, after a long pause, begins to tighten monetary policy, but at the moment the most likely scenario seems to be to keep the Central Bank rate at 16% , adds Vechkov.
According to Boevaya de Granel, a new increase in rates is also not excluded. This can be influenced by other factors such as inflation expectations, economic stability, and supply and demand in the real estate market. Global economic trends and political decisions are also among the factors.
“Rising mortgage rates and the elimination of prime mortgages could certainly lead to decreased demand for real estate due to increased monthly payments for borrowers. This will cause a cooling of demand in the new construction market and a slowdown in the growth of property prices. In any case, there will be a family mortgage, which we will see in another format, and a computer mortgage. These programs play a key role in mortgage transactions,” says the interlocutor.
Marina Kuravnova, head of the sales department of the CARBON Group, also shares her opinion that an increase in the official interest rate of the Central Bank will inevitably entail an increase in mortgage rates of all banks.
“Among our clients (GC CARBON, Sevastopol), the lion’s share of mortgages falls on RNKB Bank (PJSC) (part of VTB), so most likely in the near future this bank will also increase interest rates , which will inevitably affect demand. In the first month after the increase we expect “silence”; The buyer observes the situation and analyzes the options. Starting from the second month, demand begins to gradually return to its original level: those who need an apartment will buy it anyway, despite the increase in prices. I believe that the main conditions for the increase in interest rates were the inflated demand in the real estate market after the introduction of the “State Support 2020” program, the expert commented.
In his opinion, the measures that the regulator is now introducing are aimed at making State assistance more specific, aimed at the segment that really needs to improve its living conditions.”
“We see that the issue of increasing the key rate is now being actively promoted. In addition, starting from May 29, VTB increased interest rates for the purchase of mortgages in the primary and secondary markets. I think at least small banks will follow, as well as giants like Sberbank and other credit organizations from the top ten list. It is clear that these types of actions reduce the availability of mortgages in the country and we can only hope for the best. In addition, the preferential mortgage program is coming to an end, but family and other projects continue to work,” Albina Lyaushiriyanova, marketing director of AFI Development, agrees with her market colleagues.
Rising interest rates on programs that are not subsidized by the state mean further stagnation of the market, including the secondary one. “We hope that this program will be popular after the abolition of state support and changes in the conditions of family mortgages, that is, in July-August of this year. Other banks have reasons to raise rates. To fight inflation, the Central Bank increases the key interest rate. After the Central Bank meeting on June 9, it is expected to increase from 16% to 17%,” adds Gulsina Shakova, head of the mortgage lending department of the GC EXACTLY.
