Mortgage lending in 2023 – prospects and forecasts

For many people, mortgages remain the main tool for acquiring apartments in new buildings. State support programs help to make the purchase more profitable and reduce monthly payments. Therefore, it is not surprising that the news about the completion of the preferential mortgage program for new buildings caused a great resonance both among property buyers and among representatives of construction companies. However, already on December 15, 2022, the Government announced the extension of the preferential mortgage program for new buildings on new terms, as well as the expansion of the family mortgage program. What forecasts are given by experts, and what prospects await the mortgage lending market in 2023 we analyze with Timur Dasaev, creative director of Dachny Sezon construction company.

What has changed in the new year?

The new year meets the Russians with an increase in the rate under the state program of preferential mortgages – it has grown from 7 to 7.8%. As Russian President Vladimir Putin noted at the meeting of the Council for Strategic Development and National Projects, the rate increase is only the first step towards the gradual replacement of preferential family mortgages. Therefore, the second important issue raised at the meeting is expanding access to family mortgages in 2023. Now a loan under the program at 6% can be taken by borrowers who have two minor children. Prior to this, families with children born no earlier than 2018 could take advantage of the conditions of a family mortgage. Preferential conditions are also designed for families in which at least one child was born in 2018 and later.

“Despite the fact that the rate on preferential mortgages has increased, the conditions are still more favorable than those offered by banks. If it is possible to take advantage of the terms of preferential mortgages before the new adjustments to the program in 2024, it is worth doing it”, — Timur Dasaev, creative director of Dachny Sezon construction company, says, “Changes in family mortgages are of particular interest, since they can be additionally subsidized. Today, this question plays an important role, because there are fewer and fewer programs on the market with minimum rates of less than 3%. Sberbank has already announced that from the end of December it will stop accepting applications for mortgage loans subsidized by developers, the rate of which does not exceed 3%. So a family mortgage is a profitable option to improve your living conditions.”

What are the forecasts for mortgages in general?

The extension of the preferential mortgage until 2024 is an important decision, since most purchases in the primary market are provided through preferential programs. If we talk about mortgages in general, it is expected that in 2023 at least half of the transactions in the primary housing segment will take place with the attraction of credit funds. Among apartments, the share will be even higher – up to 70%. The National Rating Agency is confident that in a positive scenario the volume of mortgages in 2023 will increase by 10-15%, and in a negative scenario it will be at the level of 2022 or slightly lower.

To date, it is impossible not to note the increase in mortgage rates. It is influenced by various factors. This is an increase in the rate on preferential mortgages, and the key rate set by the Central Bank, and the inflation rate. In 2023, the key rate is projected at 6.5%-8.5%, while inflation is expected to be in the range of 5-7%. If the forecasts are correct, then in 2023 mortgage rates on new buildings and second homes will continue to rise.

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