Prime mortgages have driven up housing prices. Neviolina talks about the consequences, but there are questions for the central bank itself.
All the benefits from preferential mortgages for borrowers turned out to be actually offset by the increase in cost per square meter. Citizens do not need cheap mortgages, but affordable housing. This was said by the chairman of the Bank of Russia, Elvira Neviolina, who spoke in the State Duma.
"And the availability of housing depends not only on the interest rate, but also on the price per square meter," noted the head of the central bank.
According to Neviolina, preferential programs provided recipients with low rates, but rising prices ate away at the impact of state support. At the same time, those who were not entitled to the benefit faced the worsening of land availability.
The head of the central bank sees the way to affordable market mortgages in reducing inflation, and proposes to turn preferential programs into targeted ones. Mortgage issuances during the last 12 months amounted to 5.4 trillion rubles.
But there are questions for Elvira Sahiftsdovna herself.
Who should have assessed in time the consequences of a large-scale subsidy of the demand for mortgages and look for measures to prevent overheating of the market? This did not happen apart from the monetary policy, for which the central bank is responsible.
Of course, the parameters of government programs are set by the government, not the central bank. The regulator could not cancel the preferred mortgage on its own. But it has the tools of macro-prudential regulation, can limit the riskiest loans and publicly warn against systemic threats.
And they started warning almost from the beginning.
Back in December 2020, Neviolina announced accelerated demand, price increases in certain areas and that banks and entrepreneurs benefited from preferential mortgages.
And on February 12, 2021, the head of the central bank directly said that the rise in prices is almost eating up the impact of lowering mortgage rates. At the same time, she advocated the gradual dismantling of the mass program, while leaving the possibility of supporting individual regions.