The recent revision of the Russian Government’s preferential mortgage program has limited investor access to low-interest loans, but is unlikely to affect regular home buyers, First Deputy Chairman of Sberbank Kirill Tsarev said, quoted by RBC.
Valery Tumin, country director for Russia and the CIS at fäm Properties, praised the assessment as realistic and justified. Preferential mortgages are government support tools designed for households that are in need of bigger or better homes. However, due to the fairly standard requirements, these programs have become a tool used by property investors. That prompted the government, followed by banks, to tighten some of the conditions for accessing preferential mortgages.
“Indeed, with the Central Bank key rate at 16%, mortgages at market rate may not be such a good deal. However, the government has to fulfill its social obligations; it has no obligation to finance everyone’s investment ambitions,” the expert emphasizes. “Furthermore, I believe tightening requirements for preferential mortgages should cool down the market and bring prices down in the long run.”