Price growth in housing market to stop in Russia, says the head of VTB

The price growth in the housing market in Russia is to stop, while the supply from real estate developers is to increase. This opinion was expressed by the head of VTB Andrei Kostin on Friday in an interview with the TV channel Russia-24 at the VTB Capital forum “RUSSIA CALLING!".

He noted that he was for the extension of the pandemic-related support measures, and recalled that the Bank was actively developing a program of giving mortgages on preferential terms with an interest rate of 6.1%.

"Of course, “overheating” is also bad in this case, because the cost of housing shouldn’t grow. I expect the government to attract the attention of the developers to it. I think the price growth [in the housing market] will stop while the supply is going to grow”, he said.

He considers the growth of mortgage lending, as well as the growth in housing constructionю related to this, to be a driver for the Russian economy. The head of VTB pointed out that the growth of mortgage lending and the advantages of such loans led to an increase in the housing prices. "First of all, housing prices didn’t grow for quite a while; there was a time they even fell. The secondary market saw a decrease, and the primary housing market did not grow in ruble terms for a long time. Secondly, we will have this lag, but it’s not here to stay", Kostin believes.

"In the end, I think the balance will be reached," he concluded.