Developers’ project finance amounts to ₽6.5 trillion
Growth in the portfolio of loans to developers accelerated to 6% in 2024 Q1 (vs 2% in 2023 Q4). Such dynamics evidence that a substantial number of new development projects were launched and offered for sale when government subsidised mortgage programmes continued to be in effect.
Funds in escrow accounts totalled ₽1.0 trillion, which is below the record values of 2023 Q4 (₽1.9 trillion), but above those of 2023 Q1 (₽0.8 trillion). The balance of funds in the escrow accounts over the quarter remained almost unchanged amounting to ₽5.8 trillion. This is due to both a decline in real estate sales and a gradual increase in the amount of funds released from the escrow accounts. As a result, the ratio of debt coverage with funds in escrow accounts fell from 90% to 85%.
The rate on project finance gained 0.5 pp over the quarter to reach 6.9%, which is less than in 2023 Q4 (+0.8 pp). The current rate is substantially below that on the remaining part of the corporate portfolio (12.5%). Further dynamics of the cost of project finance will depend on the amount of new projects, demand for housing and, accordingly, the amount of funds credited to the escrow accounts.
More details are available in the review Project Finance in Housing Construction in 2024 Q1.