Russian banks issued 57 percent more mortgage loans to households year-on-year in the first half of 2012, according to Central Bank data on the regulator’s website on Monday.
The rush for mortgages is taking place as the Russian government prepares for a slump in global oil prices, which may provoke a new economic crisis and force local banks to hike loan rates in the wake of a liquidity shortage.
Russian banks granted 429.4 billion rubles ($13 billion) in mortgage loans in January-June 2012 compared with just 273.4 billion rubles ($8.5 billion) in the same period last year, according to the bank’s figures.
The growing demand for mortgage loans can be explained by several factors, bankers said.
“First of all, pre-crisis expectations are prompting people to spend money and invest it in real estate,” Absolut Bank Deputy CEO Ivan Anisimov said.
“Secondly, developer projects are being reinvigorated, making lending on the primary housing market more active. Therefore, [capital] supply for the purchase of real estate is up,” he said.
“Citizens are actively obtaining mortgage loans ahead of the rate increases on loans, about which banks have been warning since late last year. People have become more active and have started to obtain loans on the existing terms because after the rate increases, mortgages may prove to be unaffordable for many of them,” said Roman Slobodyan, head of the mortgage product sale department at Nordea Bank.
Russia’s largest retail savings bank Sberbank has recently raised interest rates on virtually all of its mortgage products by about 1-1.5 percent. State-run Sberbank is the leader on the domestic loan market and its rate policy serves as a guideline for commercial banks.