Rrates! Long live the HMLA!

HMLA reduced rates! Long live the HMLA!

Question: "How to lower rates will be reflected in the mortgage market"?
In answering this question, it makes sense to talk about the different time intervals.

If we consider the time interval 2 - 3 months, the mortgage market is not affected almost nothing.
It will be easy-lung revival of demand, not more.
Why?
For mortgage lending needs stability: a stable job, a stable salary and confidence in the future.
Such confidence among citizens - less than a year ago, and even more expensive products.
In order to in such a situation the population worried about obtaining a mortgage, mortgage rates should be low.


What do we know of the news?
With loan rates start at 10.3% per annum. But for whom such rates?
For socially important categories of citizens.
List of categories rather extensive: teachers, doctors, workers of military-industrial complex, scientists, public authorities and others.
But: 10.3% per annum - is if the borrower has a down payment of more than 50% of the purchase price and the loan is less than 1.5 million.
In Moscow, where the price of one-bedroom apartments start at 5 million and above, half a million, which is called "nothing."
If the borrower's first payment less than 50% - the rate of 11.4% per annum.
If the loan is more than 1.5 million, for the same socially important categories of citizens - the interest rate increases in proportion to the excess amount, but not more than 12% per annum.
That is, speaking of Moscow, in most cases, we talk about the rate on loans to 12% per annum.
Although here we are talking about quite serious limitations.
The fact that AHML considers such income borrowers who are confirmed by a certificate in Form 2-PIT.

Now imagine: Moscow.
The cost of one-bedroom apartments start at 5 million.

For example, 1 million the borrower has, and it is necessary to obtain a loan of 4 million.
To obtain such a loan in AHML, a period of 20 - 30 years old, you need to have an income of about 120 thousand!
Again, the income must be fully confirmed by a certificate on Form 2-PIT (for "socially important categories of citizens" - especially).
Something tells me that with "socially significant categories of citizens," we are talking about relatively small amounts of loans and more often than not in Moscow.

We go further: in addition to socially significant categories of citizens are those who in these categories does not apply. For them, the rates on loans - 13 - 13.5% per annum.
Today it is - in the "corridor of interest rates" on the verge of the lowest.
But anyway it is quite high rates.

If you look at the average rate of the loan, the rate at which a balance of supply and demand is at about 12% per annum. Such rate on mortgage loans has been over the last few years.
Lowering the (average) rates below 12% led to an increase in demand and rising - to the lower demand.
But this - the average rate when the best deals - by 10, and the worst - 14 - 15%, and receives an average of 12%.

Now the average rate on mortgage loans above 12% per annum.
With a higher rate, the demand - less than the supply. That is, the proposed level of rates is not enough to reach the level of demand last year.

In HMLA a strong position in the region, which shows a relatively small number of banks, mortgage loans for its own programs.

In Moscow, the Moscow region, St. Petersburg, many banks have always been banks, which have the best deals than in AHML, and therefore, the share of loans issued by AHML, was relatively small.
And this is connected not only with the rates. HMLA loans do not directly issue: only through authorized organizations.
Loans are issued HMLA money must comply with the standards serious enough. For example, in the apartments, which are issued under the guarantee of loans should not be replanning (none at all), the borrower's income must be supported by 2-PIT.
Also on the "standards of AHML made relatively small ratio of" payment / income ", that is, HMLA believe that the borrower can repay the debt spend less of their income than they find in other banks.
But because of a combination of factors, the proportion of AHML in the markets of Moscow, the Moscow region, St. Petersburg - quite small.

To visualize the proposal AHML to reduce rates - imagine a dark room and a burning in her match.
The Dark Room - Offer, and a burning match - demand from mortgage holders.
Thanks to the proposal AHML, instead of matches appeared torch: as if the room was a little brighter, but it's still not bright.

Therefore, even though the reduction of interest rates, the supply exceeds the demand of the real estate.
The gradual reduction of interest rates on mortgages and AHML, and other banks - as an attempt to catch up with the train uezzhayuschy.

But look at the situation in the long term.

What HMLA lowers rates - is good. Do not forget that AHML - Government organization 100% of the shares belong to the state AHML.

Therefore, the actions of AHML can be considered as those actions that are of interest to the state. That is, their actions HMLA shows the direction in which you should move to other banks.
So soon we will see a gradual decline in interest rates on loans to other banks, or rather, the continuation of this decline.
And it is - good for the real estate market.

But in my opinion, the reduction of interest rates by banks is too slow. The population there is a feeling that what happened reduction - is not the limit, and that the reduction of interest rates on loans will continue, but because the rate cut is not strong increases in demand.

Potential buyers of apartments - are waiting for further decline in apartment prices and further decline in mortgage rates.

To revive the demand for real estate market, you need to lower your interest rate (and not only for socially significant categories of citizens) to the level of 9% per annum, at least for a few months. (That is, do exactly what they did in 2009, to stop the crisis of the last crisis).