Novosibirsk Mortgage Credit on a ‘Post-Crisis’ Mend

May 10 – Long term commercial mortgage credit issuing grew two times faster on average in the Novosibirsk region than in the rest Russian Federation, reports the Central Bank.

Over 40,400 commercial mortgages were issued in Russia between January and March 2010 amounting to a sum total of 48.95 billion rubles. Compared with the same period in 2009, the sum total almost doubled, registering a 96.9 percent growth.

According to Central Bank data, from January to March 2010 there were 1,502 mortgage credits totaling a sum of 1.6 billion rubles issued in the Novosibirsk region, which is four times larger than the same period for 2009. Meanwhile this is still low compared to the pre crisis period, 4.46 billion rubles being issued in 2008 during the same time period.

“Advanced growth of crediting in the region relates to local authority measures on stimulating consumer demand,” deputy head of VTB-24 region branch Konstantin Kameshikov told Vedomosti. From February 2009, the regional budget started giving back initial payment under credit, amounting to about 300,000 rubles. Around 850 citizens obtained this kind of support from regional government for the first three months of 2009.

In the March 2010, a commercial mortgage crediting explosion took place in the region. Local banks issued 738 credits for a total sum of 817 billion rubles.

“Borrowers were in a hurry because in May they will be able to receive maximum 150 000 rubles support from local budget compared with 300 000 rubles like it was before”, Kameshikov explained.

“We cut down the support sum because the local banks started recovering from the crisis,” said a regional official.

“From January to March 2010 VTB-24 has issued commercial mortgages up to a total sum of 150 billion rubles, which is double in comparison with the same period of 2009,” said Kameshikov while adding that the branch is going to double this sum by the end of 2010.

State-owned Sberbank Sibir, which operates in Novosibirsk, Kemerovo and Tomsk regions of Siberia reports that it has also doubled the number of issued commercial mortgages from the beginning of this year.

“Crediting can stumble on deficiency of new apartments,” said Vladimir Kalichenko, the deputy director of the developer Energomontage. Borrowers are mostly looking for economical apartments in cost of around 1.5 billion rubles and less, but this kind of offer is getting smaller in the market because many developers blocked their projects last year because of the crisis.

According to data from real estate company Jilstroy, the offer rates per square meter in April 2010 in the Novosibirsk region on average amounted to US$1,663.