Central Bank is concerned about high growth rates of mortgage lending

The growth rate of mortgage lending in Russia now exceeds 25% in annual terms, which causes some concern for the Bank of Russia, said the chairman of the regulator Elvira Nabiullina during a press conference.

“As for the lending growth rates, they remain high in the corporate and especially in the retail segment. Thus, mortgages are growing by more than 25% year-on-year. Retail loans are fueling consumer demand. We are also concerned about the fact that lending is growing at the expense of loans to borrowers with a high debt load. In this regard, on July 1, we will return macroprudential premiums on unsecured loans to the pre-pandemic level, and from August – on mortgage loans with a low initial payment and a high indicator of the borrower’s debt burden, ”she said.

Nabiullina noted that, in addition to the already announced measures that the Central Bank announced at the end of May, the regulator is ready to further increase macroprudential loan premiums. The head of the Central Bank explained that this is necessary to prevent the accumulation of systemic risks and ensure financial stability in the economy.

Nabiullina also commented on the government’s decision to change the conditions of the preferential mortgage program “State Support 2020”. According to the innovations, from July 1, the maximum loan amount for all regions will be 3 million rubles, and not 12 million for Moscow, St. Petersburg and their regions and 6 million for other entities, as it was originally. In addition, the maximum rate on such loans will be increased from 6.5 to 7%. The program itself has been extended until July 1, 2022.

This decision of the authorities of Nabiullin is characterized as a balanced one. She noted that reducing the maximum loan size will reduce the rush demand for mortgages in the largest cities of the country.

“This will lead, of course, on the one hand, to the fact that this effect on prices, on rush demand will be less, there will be some cooling. This means leaving the program, which was considered as anti-crisis, ”said the head of the Central Bank.

By May 1 of this year, the volume of mortgage debt of Russians for the first time in history exceeded 10 trillion rubles. In general, in April, Russians took out 191,420 mortgage loans in the amount of 550.9 billion rubles. This number is 153% more than a year earlier.



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