'People obviously don't have enough money. While you and I have observed an explosive growth in cost'

Real estate market has started to level off: how the preferential mortgage programme has affected the cost of housing

There is no slowdown in mortgage issuance on the market, banks say. On the contrary, the volume of mortgage lending already exceeds the indicators of the pandemic 2020 year. In general, despite the coronacrisis, the real estate market has begun to level off: there is a demand for both primary and secondary housing. There are good trends with great potential in the residential housing market. The construction industry is developing rapidly, experts say. Tatarstan is one of the leading regions in housing construction. To what extent this result is due to preferential mortgage lending and how other factors are affecting the implementation of housing programmes — read in the material of Realnoe Vremya.

“The pace of housing commissioning is such that we are in the final phase”

Major national projects, despite the coronavirus, are being implemented quite successfully on the scale of Russia, including in Tatarstan. Despite the restrictive measures, the construction industry is developing, Deputy Minister of Construction, Architecture and Housing of the Republic of Tatarstan Ilshat Gimaev said at the round table discussion “High and preferential: how the extension of preferential mortgage programme has affected the real estate market”. According to the national project “Housing and Urban Environment”, the republic is to introduce at least 2,6 million square metres.

“This is about the level of the previous year. The pace of housing commissioning is such that we are in the final phase. As of today, a little more than 2,5 million square metres have already been commissioned. This is 96,4% of the annual plan. This year, the share of low-rise construction prevails. This bias can probably be considered positive," Gimaev said.

At the same time, he reminded that Tatarstan currently ranks the 7th in terms of housing commissioning rates in Russia.

“And we are going absolutely smoothly and normally in terms of national projects. As for the lending figures, today more than 54,000 loans have been issued in Tatarstan totaling more than 138 billion rubles with an average loan term of 21 years, a weighted average rate of 7,45% and an average loan of 2,5 million rubles," Gimaev told the participants of the round table discussion.

Real estate market has started to level off

According to Oleg Islamov, the head of the mortgage business department of Ak Bars Bank, by the results of 11 months of this year, mortgage loans have been issued for 8 billion 800 million rubles in the republic.

“Today there is no slowdown in issuance on the market. There is a slowdown in state support, as the credit limit has decreased from 6 million to 3 million," Islamov drew attention.

The growth in demand for mortgages was noted by Guzel Moseeva, the managing director for mortgages at VTB Bank in Tatarstan. The total amount of mortgage loans by the bank amounted to 14 billion rubles.

“As of today, the volume of mortgage loans issued last year has already been exceeded, and the year 2021, obviously, will be closed by exceeding the volumes of 2020," Moseeva shared her expectations. She also drew attention to that there are good trends in the residential housing market today with great potential, including in the Tatarstan market.

“Comprehensive development is gaining popularity. We are talking about cottage settlements. There have been a lot of significant easing in the market of ready-made houses, for example, a reduction in the initial payment for certain programmes, up to 10%," Moseeva said.

Otkritie Bank believes that the real estate market has begun to level out both in terms of primary and secondary housing.

“We are seeing the departure of banks from subsidised programmes. With an average check of 3 million rubles, not everyone can meet the required amount. Therefore, standard programmes of banks actively working in this direction have begun to be in demand," said Damir Gabdulkhakov, the manager of Otkritie Bank in Tatarstan. He is convinced that the trend away from subsidised support will continue, as the average purchase size is still growing.

“According to our analytical data, only 26 regions of Russia will be able to meet the average amount of 3 million rubles," summed up Gabdulkhakov.

Construction industry “will always be at the forefront of technological development”

The construction industry is developing rapidly today. There are a lot of changes, innovations that need to be quickly oriented, plus the pandemic is making its own amendments, Elvira Galyautdinova, the deputy director general for marketing and sales of Suvarstroit, drew attention.

“At the beginning of the year, more than 70% of all transactions took place with a mortgage. Now it is about the same proportion. But after the change in the credit limit, the demand was somewhat redistributed towards the Laishevsky district, where projects that fall under the new requirements are presented," she added.

According to Galyautdinova, there is a steady demand for new housing from the population:

“In any case, new buildings today are more profitable than secondary housing in terms of mortgage rates. Of course, joint programmes implemented with banks help, and not only in terms of mortgages, but also in terms of online registration. We consider it a big step forward to have the opportunity to register a transaction in a day. This gives the possiblity to work more efficiently under the new scheme using escrow accounts. Therefore, in general, we assess the changes that are now positive.”

We are sure that the construction industry occupies the key place in the Russian economy, in Sadovoe Koltso Group of Companies. In this regard, they predict a growth in this area.

“This industry will always be at the forefront of technological development. The support of the industry from the state is clearly tangible," said Olga Blinova, the project manager of Sadovoe Koltso Group in Kazan.

According to her, it is worth recognising that today mortgages are the main tool in the sale of housing:

“People obviously don't have spare money. At the same time, you and I have observed an explosive growth in cost. Moreover, its beginning was not caused by any market situations. The first jump was due to a large number of people who have the opportunity to take out a mortgage loan on preferential terms, which has not been in our country for a long time. As soon as we started applauding the high incomes of the developers, a response came from contractors who also wanted to play this game and started raising the cost of materials. Thus, the second stage of price growth has already begun, already of a purely market nature.”

At the same time, as Blinova stated, at the beginning of December, it is already possible to talk about the stabilisation of the situation in all segments of the housing market.

Natalia Eller, photo courtesy of the Ministry of Construction of the Republic of Tatarstan
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