What prevents banks from lending to residential housing – RealnoeVremya.com

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Commercial banks are reluctant to issue loans for single-family homes, awaiting the introduction of new rules to regulate the sphere of private housing construction

Photo: Irina Plotnikova

The federal experiment on preferential mortgages for single-family homes and townhouses, launched in October, has not sparked a wave of activity among the big banks operating in Tatarstan. The 7% preferential mortgages for the purchase of single-family homes in the republic have not yet been implemented, despite the increased interest of citizens in this type of housing. Banks explain their reluctance to enter this sector by the difficulties in determining their fair value and the high risks when closing transactions. Real estate experts confirm that the private housing construction loan is hampered by the opacity of the market.

Preferential mortgage for the construction of private housing will be!

Against the background of sharply rising prices for urban apartments, individual residential buildings and townhouses are becoming more attractive to potential buyers. According to real estate services, one square meter in an average single-family house is almost half the price of new multi-story buildings in Kazan – about 60-70 thousand rubles at the end of December 2021. There are few such offers on the market, but they are in constant demand.

However, Tatarstan’s banks are in no rush to launch a 7% p.a. prime residential housing mortgage scheme, which the federal government announced long ago. Yes, they were still lending for the construction and purchase of single-family homes, but the rates on those loans were comparable to consumer rates.

As Russian Deputy Prime Minister Marat Khusnullin noted, the fact that this sector accounts for only 2% of mortgages is associated with high risks of unfinished construction. But in July, announcing the Preferred Residential Housing Mortgage Program, he pledged the product should launch by the end of 2021.

According to government estimates, so far 15,000 loans can be granted for the purchase and construction of a house in Russia, the amount of which will exceed 30 billion rubles. Photo: Irina Plotnikova

To revive transactions in this sector, the Russian government has in fact already extended the preferential mortgage program to the sphere of the construction of individual housing (IHS). In October, at a meeting of the government of the Russian Federation, Prime Minister Mikhail Mishoustin said that such conditions will now apply in the field of single-family housing construction. “A lot of people who want to live in their own homes will have the opportunity to take advantage of it,” he promised. According to him, preferential loans at 7% for the purchase and construction of a private house can be taken out from October 2021 until the end of 2022.

Today, this program is in the test phase, it is only implemented as part of a pilot experiment. According to government estimates, so far 15,000 loans can be granted for the purchase and construction of a house in Russia, the amount of which will exceed 30 billion rubles.

What is preventing the banks?

However, the first wave of the program has not yet aroused the interest of banks, at least in Tatarstan. Sberbank PJSC Bank of Tatarstan branch manager Rushan Sakhbiev explained why in an interview with Realnoe Vremya: “There are a lot of issues with title deeds, and the program itself is still on point. dead in this part. First of all, according to him, this is due to the fact that the ease of construction of private housing is difficult to assess, that is, a clear scale of fair valuation of the house has not been developed. , which banks can use. But Sakhbiev hopes that when a large number of players come to this market, everything will stabilize.

The press service of Ak Bars bank also informed our publication that there had been no issues under the preferential lending program in the republic. They explained why:

“The development of loans for the construction of private housing is hampered by the fact that, as a rule, individuals are engaged in the construction of private houses. But within the framework of the existing programs aimed at the development of the construction of private housing, the construction of houses by individuals is not possible “, explained the press service of ABB.

The development of private loans for housing construction is hampered by the fact that, as a rule, individuals are engaged in the construction of private houses. Photo: Irina Plotnikova

The VTB Bank in Tatarstan is also in no rush to lend for the purchase of country houses at the promised preferential rate – it offers a higher percentage. But in public statements, they take the initiative to increase the amount of subsidies for the private housing construction market. The bank cautiously states that being able to buy your own home at a reduced rate will be an additional incentive to develop and improve housing conditions for hundreds of thousands of Russians across the country.

Commercial banks are awaiting the publication of new rules that will regulate residential housing under the escrow account regime. Central Bank chief Elvira Nabiullina said this summer that at the initial stage the product could not be mass: “So far the bottleneck is the allocation of plots of land. And the main thing is the establishment of a register of standard projects. Because it will be easier for banks to issue a product if it concerns standard projects. Banks are usually ready to go, it will be business expansion for them. “

Six months have passed since then, but the massive introduction of standard single-family home projects will have to wait (which means preferential mortgages for them, too). For example, on January 28, 2022, the creation of the design and estimation documentation and BIM models for the winning projects of the competition will be completed for the development of residential projects and standard timber infrastructure (it was jointly organized by Dom.RF and the Ministry of Construction of Russia). On February 15, 2022, the review of the design and estimation documentation is expected to be completed, after which a public register of winning projects ready for implementation will be formed, which will be included in the unified register of findings of the State (EGRZ). Dom.RF expects that the use of such projects will finally interest banks in issuing mortgages for their construction.

“This segment of real estate remains opaque”

Antonina Darchinova, expert on the Kazan real estate market, explains the caution of banks in residential housing loans by the opacity of the segment:

“Banks are in no rush to lend for the purchase of single-family homes, even in townhouses and townhouses, because this segment of real estate is not regulated by federal rules and remains quite opaque. There are many difficulties here: it is difficult to verify the quality of construction, the legality of land ownership and to give an objective assessment of a property.

Nikita Egorov, deputy director of Avangard-Realt, lists some of the issues that demonstrate this opacity:

“As a rule, private owners build individual houses: they buy plots and build several houses on them. Risks associated with registering property rights can arise at every stage. Is there a building permit? Has the project passed the state expertise? Sometimes the house can exceed the boundaries of the plot by 10-30 cm, this also happens. There are examples of unsuccessful private development in the village of Salmachi. One of the owners built a mansion, which a few years later turned out to be within the red line of the Gazprom Transgaz Kazan gas pipeline. It is impossible to sell it! The owner has flown abroad, the house is empty.

Since a house is collateral when it comes to mortgage loans, all of these risks fall on the bank that issued the loan. Thus, the reluctance of credit and financial organizations to help citizens with cheap mortgages for the construction of private housing in this context is quite understandable.

Egorov tells about his unsuccessful experience: a few years ago his agency took part in the construction of single-family houses, having bought a small plot in the suburbs of Kazan with partners. “They divided it into pieces, built several houses. But it was difficult to sell houses, because they did not agree with the banks to value the asset, “he confirms the comments of his colleagues on the complexity of a fair valuation of a Property.

The expert also mentions another potential problem: it is the legal status of townhouses, which remains uncertain: there is a dispute over whether to classify them as residential dwellings or apartment buildings. There are currently few such offers on the Kazan market and, he said, their prices have “sank”.

Will there be inclusions of residential housing in multi-story development areas in Kazan?

Meanwhile, in the suburbs of Kazan there is an unprecedented increase in the construction of multi-story housing, and no cottage settlements at all: Usady, Sokura, Osinovo, Vysokaya Gora are breaking records in terms of pace commissioning to raise buildings, capturing the best locations, says Dom.RF.

According to their data, since this year, intensive multi-storey construction began in Usady, where the volume of housing commissioning increased from 3.3 thousand square meters to 60.3 thousand square meters, an increase of 1 725%. Another popular spot is Vysokaya Gora: the growth was 389%, according to Dom’s report. RF. And so it is everywhere: in Osinovo – 293%, in Sokuri – 100%. As a result, mortgage rates are rising there.

In the suburbs of Kazan, there is an unprecedented boom in the construction of multi-storey housing. Photo: belaya-alleya.onovostroyki.ru

The suburbs of Kazan are being built more actively than the other cities of the republic. Antonina Darchinova declares: the capital is forced to grow because the city is running out of sites for a complex development:

“There is still an area in the Adel Kutuya region, but the city needs more affordable housing for population growth due to visitors from other cities. Low-rise housing will certainly appear among this multi-story development, the developers have such plans.

According to her, the bet of a mixed development is made so that the owners of cottages and multi-storey buildings can share social infrastructure.

Luiza Ignatyeva