Go to mobile


16:54 28-04-2017
Austrian OMV to purchase additional volumes of gas from Gazprom
16:26 28-04-2017
Rosatom and Slovakia negotiate spent nuclear fuel reprocessing
15:54 28-04-2017
Monument to first President of Vietnam to be erected in Russia
15:35 28-04-2017
Californian scientists push for establishing bricks production on Mars
15:14 28-04-2017
Raven Russia buys from Finns two business centers in St. Petersburg
14:45 28-04-2017
Radiological center to be built in Moscow region
14:19 28-04-2017
Austria invites Putin to mark 50th anniversary of cooperation with Gazprom
13:50 28-04-2017
Russian scientists invent new heavy-duty polymer
13:25 28-04-2017
Son of Russian Prosecutor General to engage in construction in Crimea
12:28 28-04-2017
Russia ready to assist Japan in rebuilding Fukushima NPP, Putin says
12:14 28-04-2017
Hungary built second fence from migrants on Serbia’s border
11:25 28-04-2017
Gazprom to receive permits for Nord Stream 2 by mid-2018
11:03 28-04-2017
Investment in Yamal LNG project reached $23.4 bn
10:47 28-04-2017
Japanese might take part in preparation of Arctic LNG 2 project
10:18 28-04-2017
Russia allocates $1,4bn to support its manufacturing industry
09:59 28-04-2017
RDIF and JBIC determine mechanism of Russian-Japanese Investment Fund
09:41 28-04-2017
World’s largest shipyard to be completed in China soon
17:52 27-04-2017
Russian Rosnano and Finnish Fortum set up $530m wind power fund
17:32 27-04-2017
$2m motorway to be built in Russian city of Volgograd
17:08 27-04-2017
Start of Turkish Stream pipe laying scheduled for this summer
16:52 27-04-2017
$1,4m bridge across Don River to be erected in Russia
16:36 27-04-2017
Innovative medical cluster to be built in Russian North Caucasus
16:20 27-04-2017
Austrian building group Strabag increases its net profit by 55%
16:02 27-04-2017
“Branded” trains to be launched in Moscow region by 2018 World Cup
15:44 27-04-2017
Spaniards prepare reconstruction project for Russia-Georgia’s only road
15:22 27-04-2017
PGNiG files claim against Gazprom over antitrust law violation
14:46 27-04-2017
Chilean becomes first architect to win Gothenburg Prize
14:22 27-04-2017
Uber launches flying taxi by 2020
13:44 27-04-2017
Gazprom files €730m counter-claim against Italian Saipem
12:32 27-04-2017
China allocates over 6bn yuan to building e-vehicle factories
All news


«    April 2017    »

12% mortgage loans: good but too much

logo russianconstruction.com
12% mortgage loans: good but too much

We have already written about the government’s special subsidies program for housing purchasing on the primary market at a fixed rate of 13%. However, the Central Bank has recently decreased the key rate from 15% to 14%, so the preferential rate has had to be reconsidered.

On March 17th, at the Government Commission proceedings, the Ministry of Construction together with the Russian Union of Industrialists and Entrepreneurs (RUIE) suggested decreasing the rate of the subsidies program from 13% to 12% by introducing a number of alterations to the Government Resolution dated March 13th. And, following the Minister of Construction, Mikhail Menn, this initiative was supported by the Government.
State Secretary Albert Plutnik, Deputy Minister of Construction, clarified later that, “the 12% established rate for the mortgage loans that will be granted before March 1st 2016 will remain in place during the whole loan period” . The Deputy Director General of the HMLA (Housing Mortgage Lending Agency), Andrei Semenyuk, remarked that, “The volume of a mortgage loan by a bank-participant is defined as 300 mln roubles. The banks, when the volume of a mortgage loan is less than the designated sum, can ask the HMLA for help.”
A number of financial enterprises will grant mortgage loans at 12%. As “RBC- Realty” reports, Sberbank offered the 12% rate before the Government Resolution was adopted, and the VTB-group did so after the adoption. Our magazine was informed of the Bank of Moscow’s having started to receive applications for 12% mortgage loans in the framework of the Government’s special subsidies program, and it is planning to grant 20 bln roubles in mortgage loans. As their press service reported, Reiffeisen Bank, Absolut Bank, Svyaz Bank, and “DeltaCredit” bank have announced their commitment to take part in the program, but they have not yet defined specific parameters. However, “UralSyb” and Nordea Banks will not participate in the program, said their official representatives.
Having effected the rate decrease from 13% to 12% without altering the parameters of the special program, the Ministry of Construction is optimistic. “In March the situation will change for the better”, Mikhail Menn assured us. A number of experts agree with the minister. “The rapid decrease of rates will help the situation; at least it will reduce the fall in sales and will prevent or minimize the price decrease”, Yulia Gordeeva, the Senior Analyst from Sberbank Investment Research, CFA, thinks. “In the current market, with the existing Central Bank key rate, the loans granted in the framework of the government program will be more competitive and will help to revive the mortgage market,” Alexander Engel, GC MMC (Moscow Mortgage Center), Head of New Housing Development Department, asserted.
As for us, 12% is, of course, better than 13%, but it is still a lot. Many top managers in the construction business agree with us. “The whole world has worked with mortgages for years,” the President of “Stroimash- Vibropress” holding and Vice-President of the Russian Constructors’ Union, Sergei Kuchikhin, said in an interview to Construction.ru. “But the mortgage loans we have today are nonsense: even 13% a year is unreal. All over the world the mortgage loans percentage is 3-6% or even lower. If we have such rates, everything will be all right.”
Government authorities have already warned that if the Russia Central Bank key rate decreases to 9.5%, the subsidies submission is to be ceased.
And you say: a mortgage loan, at a low rate… I suppose we are safe with it…

Andrei Chernakov

Related publications