Mortgage Loans Surge in Russia in First Quarter: Official

Mortgage loans issued by Russian banks in the first quarter of 2018 grew by 60%, and in monetary terms – by 80%, the head of state company Dom.rf Alexander Plutnik said.

The official added that according to available data, in April the volume of issued mortgage loans was 1.7 times higher compared to the same period last year, Banki reported.

Plutnik was speaking at the St. Petersburg International Economic Forum (SPIEF), which was held over the weekend. According to him, the number of loans granted last month reached around 250 billion rubles ($4 billion). Also, he said that mortgage rates would drop below the level of 9% and this will happen in the second half of 2018.

“With the stabilization of macroeconomic conditions and the return to a consistent reduction in the level of rates in the economy in the fourth quarter of 2018, mortgages rates can reach 8-8.5%,” Plutnik said.

Last week, the head of Russia’s largest lender, Sberbank, said that mortgage rates in the country will continue to drop over the next year or two, while this year will be a record one for the volume of mortgage loans.

According to German Gref, that decline in mortgage rates should be a natural process, caused by a decrease in the level of inflation.

“Mortgage cannot be reduced administratively. If inflation goes down — and all the prerequisites for this are here — mortgage rates will automatically fall. Based on the situation that we see today, it is most likely that before the end of this year and during next year, we will see a reduction in rates”, the head of Sberbank said in an interview with TV Rossiya 24.