The Accounts Chamber predicted a collapse in the mortgage market

The Accounts Chamber predicted a collapse in the mortgage market
The Accounts Chamber predicted a collapse in the mortgage market
28 September 2021, 12:33EconomyPhoto:
The auditors of the Accounts Chamber (AC) of the Russian Federation called on the Central Bank to pay close attention to the mortgage market in order to prevent the formation of a financial bubble that threatens the security of the system.

The reason for concern of the auditors of the joint venture was the sharp increase in the mortgage portfolio and the rapid acceleration of housing prices.

According to RBC, citing data from the joint venture's report on the execution of the federal budget for 2020, the concern of the auditors is serious.

"The mortgage market requires close attention from the regulator, since a sharp increase in the mortgage portfolio and rising real estate prices can form a financial bubble, which could seriously hit the stability of the financial sector and the income of the population", - underlined in the statement.

In 2020, the volume of mortgage loans granted to Russians increased by 21% and reached 9.5 trillion rubles.

Compared to 2019, the number of loans issued increased by more than a third - by 35%, and the amount - by 51%, to 4.3 trillion rubles. In just a year, banks issued 1.713 million mortgage loans.

The increase in mortgage demand provoked a sharp rise in housing prices - by 39% for the year, while over the previous seven years combined, prices rose by only 33%.

To reduce the rate of bubble formation, the Accounts Chamber has proposed issuing preferential mortgages only once in a lifetime. The Central Bank also agreed with the experts' proposals, initiating a gradual curtailment of the preferential mortgage program in the country. Previously, preferential mortgages could be taken at 6.5% per annum, now the rate has risen to 7%.

The preferential "family" mortgage is reserved for families with children if the baby was born from January 1, 2018 to December 31, 2022. Its maximum amount is limited to 6 million rubles in the country and 12 million rubles in the capital regions. In this case, the family must be able to make an initial payment for housing in the amount of at least 15% of its total cost.

The rapid rise in house prices has negatively affected the purchasing power of the population. In the context of a sharp rise in price per square meter, Russians, soberly assessing their capabilities, began to refuse to apply for a mortgage. At the same time, in many regions, credit institutions record an increase in delinquency on loans already taken: people are unable to pay them.

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