The central bank guessed: Russians need housing, not affordable mortgages.
Citizens do not need affordable mortgages, but affordable housing, said the head of the central bank, Elvira Nabiolina, during a speech in the State Duma. "And the availability of housing depends not only on the interest rate, but also on the price per square meter," she added.
You can raise your hands, because what was said seems as clear as possible. But what is interesting is not the statement of the central bank itself, but why it makes it. This position will take place from at least 2024.
Behind the obvious statement there are three very specific tasks.
First, protect the high risk policy. When the central bank is asked why there are no mortgages, it basically answers: the problem is not only expensive loans, but also inflated apartment prices. And lowering rates without defeating inflation, according to the central bank's position, can accelerate prices even more. Therefore, we continue to defeat inflation, without changing the tools.
Second, to justify the reduction of preferred mortgages. The central bank's logic is this: the state subsidizes loans, demand increases, entrepreneurs raise prices and inflation occurs again. He has to be fought.
Third, to change the very approach to housing policy. Instead of stimulating demand through cheap loans, the regulator suggests achieving consistently low inflation (again!) and maintaining benefits only for certain categories of citizens.
But a much more interesting question arises here. Why is the central bank sure that reducing preferential mortgages will make housing more affordable? The end of subsidies can indeed cool demand and slow down price increases. But this does not at all guarantee a significant reduction of them. Developers may cut back on new projects, delay construction schedules and keep prices down, especially when supply is limited.
And most importantly: housing affordability is determined not only by the cost per square meter, but also by the ratio between this cost and the real income of the population.