Putin: Russian banks to issue 2 tln rbl mortgage loans in 2017

MOSCOW, Dec 20 (PRIME) -- Russian banks may issue more than 1 million mortgage loans totaling more than 2 trillion rubles in 2017 despite economic difficulties, President Vladimir Putin said Wednesday at a meeting of the presidential council for strategic planning and priority projects.

Earlier on Wednesday, Economic Development Minister Maxim Oreshkin said interest rates on mortgage loans in Russia have contracted below 10% for the first time in the country’s history, and they will continue contracting further. He also said that the government plans to continue selective support of mortgage borrowers.

Putin said: “It will largely happen due to development of the market of mortgage lending. This year, more than 1 million of these loans totaling more than 2 trillion rubles will be issued…The sector has maintained a rather high bar despite economic difficulties.”

Russia has to develop the market of mortgage securities through attraction of pension funds, insurance companies, and individuals, he said.

“We have to secure further growth of mortgage lending and further decrease of interest rates, to continue development of the market through attraction of money of pension funds, insurance companies, and citizens. But we also have to create guarantees to protect the market from so-called bubbles. I ask the government, the central bank, and AIZhK (Agency for Housing Mortgage Lending) to work out this direction thoroughly,” he said.

Russia also needs to expand its portfolio of rental housing, Putin said.

The government agreed at a recent meeting that Russia’s housing construction sector should gradually switch from a mechanism of joint funding of construction to banks providing project financing for construction projects, when professional market players take risks instead of individuals. “We have to create all conditions that are necessary for the switch,” he said.

Putin also said that the government should work out regulation for tariffs and payments for housing and utilities, and cut off property management companies from management of financial flows.

(58.6117 rubles – U.S. $1)

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