Funds in escrow accounts in equity construction grow by 25% in March

In March, the number of escrow accounts increased by 15 thousand, or 24%, and exceeded 77,000. This monthly growth is greater than it was at the end of last year (nearly 5,000 accounts). The amount of funds placed in escrow accounts by equity construction participants grew by 25% to 271.4 billion rubles.

Banks concluded 1,064 loan agreements with construction companies. The credit line amount exceeded 1.2 trillion rubles. Developers’ debt to banks, which is formed based on funds they need to continue construction, reached 413.4 billion rubles. The loan agreements that have already been concluded provide for a further expansion of lending of over 844 billion rubles.

The average interest rate on loans to developers ranges from 4.18% to 6.03% (depending on federal districts). For each agreement, the interest rate largely depends on the amount of funds accumulated in escrow accounts as well as on other factors (such as programmes aimed at supporting small and medium-sized developers).

45 constituent territories of Russia have completed 123 projects that were delivered using escrow accounts, over 5,400 escrow accounts were released, and the funds transferred from these accounts to developers and banks to repay issued loans exceeded 12.4 billion rubles.

Therefore, the monitoring data as of 1 April 2020 do not give grounds to consider the contraction of project financing due to the crisis. However, it should be noted that the main reasons for a potential contraction (restrictive measures, termination of work at construction sites), which emerged in late March — early April, so far may not have had a negative impact on the dynamics.

At the same time, the Bank of Russia and the Government of the Russian Federation are taking measures to support mortgage lending to mitigate the negative impact of the crisis on the industry, for example, regulatory relaxations for loans to residential property developers.