Central Bank Chairman Elvira Nabiullina named conditions for reducing mortgage rates to 7-8%
UFA, 8 November 2019. /Bashinform News Agency/ translated by Tatiana Aksyutina/.
Mortgage rates may drop in Russia during several years to 7-8% per annum with inflation of 4%, said Elvira Nabiullina, the Chairman of the Central Bank of Russia, on Wednesday, Interfax reports.
“Mortgage rates will fall after inflation, a decrease in inflation. And we expected that in the future, for several years, the mortgage rate could be 7-8% if we have inflation at 4% and no additional risks”, Nabiullina said while delivering a report to the Federation Council.
At the end of October, for the first time since the end of 2017, the Bank of Russia lowered its key rate by 50 basis points (bp) to 6.5% per annum.
According to the Central Bank, the volume of mortgage lending in Russia in January-September 2019 amounted to 1.96 trillion rubles, which is 5.3% less than in the same period in 2018. The number of granted housing loans for the first nine months amounted to 889.4 thousand, which is 13.9% lower than last year. The average weighted rate on mortgages given to individuals in rubles decreased from 9.91% per annum in August to 9.68% in September. Thus, the rate almost returned to the level of December 2018, when it amounted to 9.66%. In August, the weighted average mortgage rate for the first time since the beginning of 2019 fell below 10%, amounting to 9.91% per annum.
It is planned to reduce the rate to 8.5% by 2021, to 7.9% — and by 2024. The volume of mortgage loans by 2024 is projected to double — from 1.1 to 2.26 million transactions.
Earlier, Bashinform reported that the regulations on subsidizing mortgage rates for large families were also extended to families with disabled children. Now, such families will be able to get a residential loan at a rate of 6% per annum.