Mortgage lending growth registers record highs in 2017: 1.1 million new loans, totalling 2 billion rubles

In 2017, the housing mortgage lending (HML) market demonstrated record growth amid falling interest rates. The value of issued loans grew by 37.2% and reached 2 trillion rubles thereby exceeding last years’ figures. According to the data published on the Bank of Russia website, overall, banks issued 1.1 mortgage loans.

The peak in mortgage lending was observed in December 2017 when the number of new loans reached 151 thousand worth more than 290 billion rubles (compared with 103 thousand loans worse 184 billion rubles in the previous year); the growth was 46.4 and 58.1% respectively. In December 2017, the proportion of ruble HMLs in all new household loans was 27.3%, marking a 1.8 percentage point growth month on month.

The average weighted rate on ruble-denominated mortgage lending fell consistently over the year and reached an all-time low at 9.79% in December 2017 (11.54% in December 2016).

By end-2017, total outstanding amounts on HMLs were 5.2 trillion rubles (up by 15.5% year on year). Outstanding foreign currency mortgage loans contracted considerably, showing a 40.3% reduction by year-end. The proportion of these loans in the total HML was merely 0.8%.

Overall, the quality of loan servicing improved in the mortgage lending segment: as of 1 January 2018, the share of overdue debt on HMLs dropped to 1.3% compared with 1.6% a year earlier.

6 February 2018