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AIZhK sees no prerequisites for mortgage bubble in Russia

MOSCOW, Dec 21 (PRIME) -- The Agency for Housing Mortgage Lending (AIZhK) sees no prerequisites for a bubble on the mortgage market in Russia, a representative of the agency told PRIME on Thursday.

Earlier in the day, Kommersant business daily reported that the central bank was seriously concerned with a plan envisaged by the agencyТs development strategy to more than double mortgage lending in Russia to 10 trillion rubles in 2020. The central bank thinks that fulfillment of the plan may lead to a mortgage bubble in Russia similar to the one that caused the 2008 crisis in the U.S.

The agencyТs representative said: УThe market of mortgage lending in Russia has no prerequisites for a mortgage bubble. This is proven by stable prices for property, by high quality of mortgage portfolios of banks, and by high requirements that banks set for borrowers.Ф

The strategy was approved unanimously by the agencyТs supervisory board on November 30, and the agency has not received any complaints from the central bank until now, the person said. The supervisory board includes representatives of the central bank, Vnesheconombank (VEB), Gazprombank, as well as the government and a number of ministries.

УOne of the major reasons for mortgage collapse in the U.S. was a wide spread of high-risky loans with low initial installments, low underwriting, and with further transformation of them into mortgage securities. The mortgage market in Russia is stable and has high potential for further development, as the share of mortgage in RussiaТs GDP (gross domestic product) stands at 5%, while in some other countries the average figure is 35%,Ф the person said.

According to the agency, the share of overdue mortgage loans stands at only 2.34%, and dynamics of prices for housing are good as they have been contracting in real terms since 2013. The share of mortgage loans with low initial installments is also low, and the agency supports measures of the central bank to toughen the regulation of loans with initial installments of below 20%, the representative said.

(58.7170 rubles Ц U.S. $1)

End

21.12.2017 10:51
 
 
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