While GDP decreased in the second quarter of 2011 to 3.4 percent yoy, household consumption has recovered from the post-crisis shock and lending to the household sector is growing, including for mortgages. The results of the first half of 2011 show that 195.5 thousand mortgage loans for the total amount of RUB 268.6 billion (USD 9.5 billion) were provided to households.The average weighted cumulative rate on mortgage loans in rubles from the beginning of the year was 12.2 percent, and for loans in foreign currency 9.6 percent. Rates have come down as a result of government policy and lending conditions were relaxed. Arrears in payment were 3.5 percent of the mortgage portfolio, which is predicted to come down to 3 to 3.3 percent. Arrears on foreign currency loans steadily increased to 11.5 percent.
Supply of new housing was below last year’s volume as debt financing in the construction sector is still constrained. Despite low construction volumes and a recovering mortgage market, house-prices remained stable since investment demand has not yet picked up.
AHML forecasts that Russia will reach pre-crisis levels of mortgage lending during 2011 (RUB 655 billion in 2008 or USD 23.1 billion)